Nifty remains rangebound
The Nifty 50 remained rangebound and closed lower for the second consecutive session on October 16. The index has not only broken the 50-day EMA (Exponential Moving Average - 25,045) but also fallen below the upward-sloping support trendline, although it defended the 24,900 level, which, according to experts, can serve as immediate support for the index. Falling below this level could take the index down towards 24,800-24,700; however, in the case of a rebound, 25,100-25,200 remains a key hurdle, coinciding with the 10- and 20-day EMAs.
The Nifty 50 touched an intraday high of 25,093 and a low of 24,908 before closing the session at 24,971, down 86 points. The index has formed a small bearish candlestick pattern with upper and lower shadows on the daily charts, indicating rangebound action in the market.
According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the underlying trend of the Nifty continues to be choppy with a weak bias. "A sustainable move only above 25,200 and a sharp weakness below 24,800-24,700 could bring strong momentum in the market on either side," he said.
According to the weekly options data, the maximum Call open interest was seen at the 25,500 strikes, followed by the 25,200 and 25,100 strikes, with maximum Call writing at the 25,500 strikes, followed by the 25,000 and 25,300 strikes. On the Put side, the 24,500 strike holds the maximum open interest, followed by the 25,000 and 24,800 strikes, with the maximum writing at the 24,800 strikes, followed by the 24,300 and 24,500 strikes.
The above options data also suggests that 25,100-25,200 is likely to be the resistance zone for the Nifty 50, with support at 24,800.
Bank Nifty
The Bank Nifty has reclaimed the 52,000 mark once again but could not hold it, indicating a strong hurdle for further upside. The index fell 105 points to 51,801 and formed a small bullish candlestick pattern with a long upper shadow on the daily charts, indicating selling pressure at higher levels.
In the short term, Bank Nifty will face resistance near 52,030. If the index sustains above this level, it could attempt to test higher levels of 52,500–52,800, according to Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C Mehta Investment Intermediates.
On the downside, he noted that 51,000 offers strong support, where the 100 DEMA is positioned. As long as the index holds above 51,000, a "buy on dips" strategy is advisable, he advised.
Volatility increased slightly for another session but remained at lower levels; hence, the bulls remained in a comfortable zone. The India VIX, the fear indicator, was up by 0.38 percent to a level of 13.05.
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