The Indian stock markets are expected to open on a muted note for Friday, October 25, tracking mixed global cues.
The Gift Nifty, which trades as an indicator for the broader Indian market, was flat at around 24,450, showing a marginal discount of 2 points from the previous Nifty futures close.
The domestic market, including the Sensex and Nifty 50, had a lackluster performance on Thursday, with both indices closing marginally in the red.
The Sensex dipped by 16.82 points, closing at 80,065.16, while the Nifty 50 ended 36.10 points lower at 24,399.40, marking its fourth straight session of losses.
On the technical charts, Nifty formed a small negative candle, indicating that the market has reached swing lows around the 24,341 mark, which may suggest a potential reversal on the horizon.
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Technical Setup
The technical outlook for Nifty reveals the formation of a doji-type candle pattern, which often indicates indecision or a potential reversal in the market.
According to analysts like Nagaraj Shetti from HDFC Securities, the appearance of a doji pattern, especially after significant downward or upward movements, can signal an impending reversal. The doji pattern on Thursday suggests that bulls may be ready to stage a comeback after days of weakness.
Additionally, the market’s recent inability to generate sharp selling momentum at lower levels has sparked optimism.
While the short-term trend for Nifty remains negative, analysts are beginning to see signs of an upside bounce. A sustained move above the 24,600 to 24,700 levels could confirm this reversal, whereas a slide below 24,300 would likely invite further downside pressure in the near term.
Nifty Options Data
A closer look at the open interest (OI) data for Nifty options provides insight into market positioning. Traders have increased both put and call writing at the 24,400 level, though more calls are being written than puts, reflecting expectations of a sideways to downward bias for Friday.
The Nifty’s narrow range and recent doji candle indicate that traders may be bracing for volatility ahead of the weekly close.
Nifty 50 Prediction
Jatin Gedia, a Technical Research Analyst at Sharekhan by BNP Paribas, believes that Nifty has been oversold after four consecutive sessions of declines.
This could lead to a pullback toward the 24,550–24,600 zone, where key hourly moving averages are located. However, Gedia warns that this pullback is likely to encounter selling pressure at higher levels, presenting a selling opportunity for short-term traders.
On the downside, key support levels for Nifty are expected between 24,200 and 24,000. Other experts, including Aditya Agarwal of Sanctum Wealth, also note the oversold conditions in Nifty’s technical indicators.
While a short-covering rally could push Nifty to 24,620–24,740 levels, any such move would likely be short-lived given the weak medium-term market structure.
Bank Nifty Outperforms, but Faces Key Resistance Levels
In contrast to the Nifty, Bank Nifty outperformed on Thursday, closing 292 points higher at 51,531.15, forming a bullish candlestick pattern.
Bank Nifty continues to find support around the 51,200 level, which has prompted short covering and led to an advance above 51,500.
Analysts expect Bank Nifty to encounter resistance around the 51,750 mark, and if it breaches this level, the next target would be 52,060.
Significant call writing at the 52,000 level suggests that profit booking could occur, capping any further upside. On the downside, key support levels are located at 51,100 and 50,800.
Open Interest Analysis and Key Data Points
- Nifty OI – Nifty’s October futures saw a slight dip in open interest (▼0.6%) to 5,12,227, indicating a reduction in positions ahead of the weekend.
- Bank Nifty OI – Bank Nifty’s October futures also saw a decline in open interest (▼8.7%) to 1,47,602, reflecting the short-covering rally in Thursday’s session.
The reduced OI in both Nifty and Bank Nifty suggests caution among traders, with a focus on key resistance and support levels for directional cues.
FIIs and DIIs Activity
FIIs continued their selling streak for the 18th consecutive session, offloading shares worth ₹5,062 crore. In contrast, DIIs remained net buyers, purchasing shares worth ₹3,620 crore, offering a degree of support to the market.
Sectoral Outlook and Stocks to Watch
- Long Build-up – Stocks like Coforge, Syngene, Punjab National Bank, and Shriram Finance saw long build-ups, suggesting optimism in these names.
- Short Build-up – Hindustan Unilever, Dr. Lal Pathlabs, Escorts Kubota, TVS Motor, and Nestle India witnessed short build-ups, indicating bearish sentiment.
Global Cues and Asian Market Update
Global markets offered mixed signals, with U.S. indices posting varied results. The Dow Jones fell by 0.3%, while the S&P 500 and Nasdaq rose by 0.2%, boosted by Tesla’s robust earnings and guidance for electric vehicle sales.
In Asia, Japan’s Nikkei 225 declined by 0.7%, while Hong Kong’s Hang Seng gained 0.5%, signaling subdued sentiment across the region.
For Indian markets, a flat opening is expected as traders closely watch global cues and key domestic support levels. The Nifty and Bank Nifty will remain in focus as both indices attempt to navigate pivotal resistance zones ahead of the weekend.
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This article is for informational purposes only and reflects the analysis and views of SMJ. The information provided here should not be considered financial advice, and market participants should conduct their own research or consult with a professional advisor before making any trading or investment decisions. SMJ is not responsible for any losses incurred due to actions taken based on the information provided in this article.