Technical View: Bears may take charge if Nifty breaks 25,700 support, Bank Nifty’s next move hinges on 58,000

Nifty Outlook for October 31

The benchmark Nifty 50 witnessed profit booking and wiped out all of its previous day’s rally, possibly following Fed Chair Jerome Powell’s signal of no rate cut in the December policy meeting. As a result, the index failed to defend the psychological 26,000 mark, which is crucial for further upward movement, and closed below the 25,900 zone.

If the index sustains below the 26,000–25,950 resistance levels, consolidation may continue with immediate support at 25,800–25,700. A fall below this zone could open the door for a decline towards 25,500, which remains a crucial support level.

Until the index sustains above 26,000, the upward momentum may remain limited.

The Nifty 50 remained under pressure throughout the session, hitting an intraday low of 25,845 before closing at 25,878, down 176 points (0.68 percent), and forming a bearish candle on the daily charts.

The RSI stood at 64.14, while the Stochastic RSI showed a bearish crossover, signalling market caution. However, the index still trades above all key moving averages, which remains a positive indicator.

“Though the short-term trend remains up, with the index trading well above its short-term moving average, a minor extension of the correction cannot be ruled out,” said Rupak De, Senior Technical Analyst at LKP Securities.

According to him, if Nifty sustains below 25,900–25,950 on Friday, it may test 25,800 or lower. On the other hand, a decisive move above 25,950 could provide much-needed strength to the bulls, he added.

The weekly options data suggested that 26,000 is expected to act as a strong resistance for the Nifty 50, with key support at 25,500.

The 26,000 strike holds the maximum Call open interest, followed by the 26,200 and 26,500 strikes. The maximum Call writing was seen at the 26,000, 25,900, and 26,100 strikes.

On the Put side, maximum open interest was at the 25,500 strike, followed by 25,900 and 26,000 strikes, with maximum Put writing at the 25,600, 25,500, and 25,900 strikes.

Bank Nifty

The Bank Nifty also experienced profit-booking-led selling pressure, falling 354 points (0.61 percent) to 58,031, with above-average volumes. It formed a bearish candle with an upper shadow on the daily timeframe, indicating a negative bias with pressure at higher levels.

“On the downside, major support for Bank Nifty is seen near 57,630, while the immediate hurdle is positioned around 58,580. As long as the index holds above 57,630, it is likely to consolidate within the band of 57,630–58,580,” said Hrishikesh Yedve, AVP – Technical and Derivative Research at Asit C. Mehta Investment Intermediates.

A decisive break above 58,580 could propel the index towards the 59,000 level, he added.

Meanwhile, the India VIX, the fear index, has been gradually moving higher, rising 0.79 percent to 12.07, signalling some caution for bulls, but not major discomfort unless it sustains above the 13 zone.