The Indian stock market is expected to begin on a low note today; on October 16, the trends of international markets affect the domestic market.
The Sensex and Nifty 50 are anticipated to see a soft opening after closing lower in the last session. Signs of Gift Nifty, trading near the 25,045 mark with a margin of around 80 points, indicate lower levels for the market in general.
Also Read: Gold and Silver Rates on October 15: Minor Decline in Gold Prices, Silver Holds Steady
Recap of Previous Session
On October 15, the benchmark indexes ended in red, caused by the loss of significant players like Reliance and Bajaj Auto. The Sensex decreased by 152.93 points to close at 81,820.12, and the Nifty 50 lost 70.60 points, or 0.28 percent, and ended at 25,057.35.
Despite the losses of the day, The Nifty 50 exhibited the appearance of positive candles on its daily charts. Small shadows on the upper and lower sides reflected market uncertainty.
This market action demonstrates the significance of the resistance level at 25,200, and analysts predict that a further move in the range is likely in the short term.
A slight ascending triangle pattern was seen on the intraday trading timeframe, suggesting an upside breakout.
Nifty 50 Outlook and Key Levels
The short-term direction of Nifty 50 is still tense, and the index trades between 25,200 and 24,900. If the index breaks above the resistance of 25,200, we could see the index move toward the 25,500-25,600 range in the near term.
On the other hand, there is a possibility of support in the 24,900 and 25,000 ranges, which are critical levels for traders to monitor.
Based on Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the Nifty 50 index’s current move signals important resistance around 25,200. If the index exceeds this mark, it could see more upside movements and 25,500 as possible targets.
Aditya Agarwal, head of Derivatives & Technical Analysis at Sanctum Wealth, concurs that the short-term structure is favorable.
He explains that dips in the 25,020-24,940 area could provide buying opportunities as the index might then head towards the 25,250-25,340 levels. However, any dip below 24,700 could sabotage the optimistic forecast and lead to an abrupt decline.
Open Interest (OI) Data for Nifty 50
The Nifty OI data accurately indicates the market’s expectations. For the call aspect, the top OI is located at 25100 and 25200 strike prices, suggesting a significant resistance at these prices.
On the other side, the highest OI is seen at strike prices of 24,900 and 25,100, which establish these as crucial markets’ support levels.
Hardik Matalia, a Derivative Analyst of Choice Broking, observes that this OI pattern strongly confirms the range-bound move that Nifty is experiencing. The traders are likely to take a cautious approach within this range, paying attention to key resistance and levels of support.
Bank Nifty Outlook
Contrary to Nifty and unlike Nifty, the Bank Nifty index displayed resilience in the past session. It closed 89.10 percentage points better at 51,906.00. The index’s higher performance than the market overall suggests that the banking sector could sustain positive momentum shortly.
Dr. Praveen Dwarakanath, Vice President of Hedged. In The Hedged, the Vice President explains that momentum indicators suggest increased optimism for Bank Nifty.
Its ADX DI+ line’s upward slope and the falling ADX DI- line suggest a continued positive trend. The author also points out that options writers have seen an increase in call writing to the 52,000 level, indicating that this level could serve as a temporary stoppage before further upward movements.
Aditya Agarwal thinks the initial support to Bank Nifty lies around the 52,000 mark. Short-covering could push the index towards the 52,460-52,800 range if the index crosses this level. A dip to the 51,680-51.440 zone could offer buyers a new opportunity to purchase traders.
Global Market Sentiment
The weak signals from global markets are adding to India’s skepticism. Wall Street ended lower in the session on Friday, pulled down due to losses in the tech sector.
The Nasdaq declined by 187.10 points, or 1.01 percent, to close at 18,315.59. The S& P 500 dropped by 44.59 points or 0.76 percent and ended at 5,815.26.
In Asia stock markets, there were mixed performances, and Japan’s Nikkei 225 fell by 721.65 points, which is 1.81 percent, before closing at 39,188.90. South Korea’s KOSPI also closed lower, falling by 0.71 percent to 2,614.64.
Hong Kong’s Hang Seng and Singapore’s Strait Times Index posted gains that increased by 0.67 percent and 0.39 percent, respectively.
Strategy for Market Participants
VLA Ambala, the Co-Founder of Stock Market Today, suggests that investors consider the possibility of a “sell on rise” strategy in the areas of resistance that are key to the range of 25,300-24,900 for the Nifty 50.
Its direction for the following 3-5% movement will depend on whether the Nifty50 holds between or above the range.
To be sure of Bank Nifty, traders are advised to carefully keep an eye on the 52,000 level. If the index stays above 52,000, this could result in additional gains.
The short-covering trend is around 51,500, according to Dwarakanath, and may further boost confidence in bulls.
Also Read: Market Outlook & Trade Setup for October 15: Nifty 50 and Bank Nifty Brace for Flat Start
The views and analysis presented in this article are the opinions of SMJ (Stock Market Journal) and are intended for informational purposes only. They do not constitute investment advice or recommendations to buy, sell, or hold any financial instruments. Market conditions can change rapidly, and past performance is not indicative of future results. Readers are advised to conduct their own research or consult with a financial advisor before making any investment decisions. SMJ is not liable for any losses that may arise from reliance on this information.
