The Indian stock market is poised for a cautious start on Thursday, October 24, 2024, as global market sentiment remains weak.
GIFT Nifty futures indicated a gap-up opening for the domestic benchmarks, with the futures trading at 24,537.50—a premium of about 54.85 points compared to the previous close. This comes after a volatile Wednesday session where both Sensex and Nifty 50 closed with marginal losses.
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Nifty 50 Recap and Technical Analysis
On Wednesday, Nifty 50 fell by 0.15% to settle at 24,435.50. Despite the losses, Nifty formed a small positive candle on the daily chart, showing an upper shadow—a pattern that senior technical analyst Nagaraj Shetti from HDFC Securities describes as a bullish inverted hammer, though not a classic example.
According to Shetti, this indicates a potential upside move if the index sustains above 24,605, a crucial resistance level.
The broader picture remains bearish. Shetti highlights the ongoing lower top-lower bottom pattern, which has been in place since Nifty’s drop from the recent top of 24,978 on October 21.
The analyst suggests that while Nifty may see short-term bounces, the overall trend continues to reflect weakness. A sustainable close above 24,650–24,700 could help the index recover, but a dip below 24,350 could drag Nifty down to the 24,000 mark.
Nifty Open Interest (OI) Data
According to Mandar Bhojane, Equity Analyst at Choice Broking, the OI data is critical in identifying key support and resistance levels.
On the call side, significant open interest was seen at the 24,600 and 24,500 strike prices, signaling resistance. Meanwhile, the highest put-side OI was recorded at 24,400 and 24,300 strikes, indicating strong support around 24,350.
Bhojane further notes that the current technical setup suggests short-term weakness, though strong support levels could provide a foundation for an eventual rebound.
Outlook for October 24
Dr. Praveen Dwarakanath, Vice President of Hedged.in, notes that Nifty 50 has been hovering near its crucial support level of 24,400.
A break below this could trigger further downside, bringing Nifty closer to 24,000. He also points to the Average Directional Index as an indicator of persistent weakness, with the ADX DI- line currently positioned above the ADX DI+ line, reinforcing the bearish sentiment.
Options writers seem to support this outlook. Dwarakanath reports that puts have been written below the 24,400 level, while calls are being written above it, indicating that Nifty may see a range-bound session on Thursday, with the index likely fluctuating between 24,400 and 24,750.
Expert Insights on Trading Strategy
Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, emphasizes that Nifty 50’s hourly and daily momentum indicators are showing a negative crossover.
This suggests selling pressure may continue, with Gedia recommending a “sell on rallies” strategy. He suggests targeting the 24,200–24,000 range on short positions, especially if Nifty moves toward the 24,680–24,750 zone.
Aditya Agarwal, Head of Derivatives & Technical Analysis at Sanctum Wealth, also highlights that the overall structure of the market remains bearish.
He advises traders to use any pullback toward 24,580–24,660 as an opportunity to exit long positions and initiate fresh shorts. Agarwal sees immediate support at 24,300, with a potential drop to 24,120 if this level is breached.
VLA Ambala, Co-Founder of Stock Market Today, suggests watching key support levels at 24,135 and 23,920, while resistance can be expected near 24,440 and 24,590.
Bank Nifty Performance and Outlook
Bank Nifty, which ended Wednesday’s session at 51,239, down 18.15 points (0.04%), has been exhibiting a Bullish Inverted Hammer pattern on the daily chart.
Like Nifty, Bank Nifty is trading near crucial support levels at 51,000 and 50,800, with some analysts predicting a pullback from these levels due to buying interest in private sector banking stocks.
Aditya Agarwal suggests that a close below 50,800 could weaken the Bank Nifty, potentially dragging it to 50,200 or 49,600. On the upside, Bank Nifty may encounter resistance at 51,800 and 52,240, which could be used as profit-taking levels for traders holding long positions.
Gedia remains bearish on Bank Nifty, expecting it to drift lower toward 50,500 in the short term. Dwarakanath of Hedged.in points out that the index has been rejected from its 20-EMA, indicating continued weakness.
The options writing data also suggests that calls are being written above 51,300, reflecting an expectation of further downside.
Global Market Sentiment
Global markets have been under pressure, with U.S. indices closing lower on Wednesday. The Nasdaq fell 1.60%, while the S&P 500 and Dow Jones lost 0.92% and 0.96%, respectively.
In Asia, markets showed mixed trends—Japan’s Nikkei 225 rose by 0.19%, but Hong Kong’s Hang Seng index declined by over 1%.
The weak global cues may add to the caution among Indian investors, though the gap-up start indicated by GIFT Nifty futures suggests that local factors might provide some support at the opening bell.
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Disclaimer – The views and analysis presented in this article are provided by SMJ and are based on publicly available data and market research. This article is for informational purposes only and should not be considered financial or investment advice. Always consult a professional before making any trading decisions. SMJ does not assume any responsibility for any trading losses or financial consequences arising from the use of this information.
