The Nifty 50 staged a stellar opening above the 26,000 mark but could not sustain those levels due to profit booking. The index lost more than 200 points from the day’s high to close with moderate gains on October 23. It continued its upward journey for the sixth consecutive session but failed to hold above 25,900 on a closing basis for the third day in a row.
Experts noted that the index needs to decisively clear the 25,900–26,100 zone to resume its upward move toward the record high of 26,277. Until then, consolidation may continue, with immediate support at 25,700, followed by 25,500 as a crucial support level.
The Nifty 50 started the day well above the psychological 26,000 mark and hit an intraday high of 26,104, but failed to sustain both levels in the last couple of hours of trade due to profit booking. This came amid concerns following US sanctions on Russian oil and the possible postponement of India–US trade negotiations. The index closed off the day’s high at 25,891, up 23 points, forming a long bearish candle with a minor upper shadow on the daily timeframe.
Technically, this market action indicates the formation of a ‘bearish meeting line’ candlestick pattern. Analysts said this is not a good sign for bulls, and any weakness from here could confirm a reversal pattern on the downside.
However, the overall uptrend remains intact, supported by the continuation of a higher high–higher low structure and a generally healthy setup in technical and momentum indicators.
“The overall near-term trend of Nifty remains positive. Any confirmation of a negative reversal is likely to open a short-term downward correction in the market, which could be a buy-on-dips opportunity. Immediate support is placed at 25,700,” Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities said.
According to him, a decisive move above 26,100 could open the next upside towards 26,300–26,400 in the near term.
Monthly options data suggested that the Nifty 50 is expected to remain within the 25,500–26,500 range in the short term.
The maximum Call open interest was seen at the 26,500 strike, followed by 26,200 and 26,000 strikes, with maximum Call writing at 26,500, 26,200, and 26,100 strikes. On the Put side, the 25,500 strike held the maximum open interest, followed by 25,700 and 26,000 strikes, with maximum Put writing at 26,000, 26,100, and 25,800 strikes.
According to Rupak De, Senior Technical Analyst at LKP Securities, the short-term trend remains intact, with potential to revisit higher levels around 26,200 in the next 10–15 days.
“On the higher side, immediate resistance is placed at 26,000, above which the index may move towards 26,200,” he said.
Bank Nifty
The Bank Nifty shed 500 points from the day’s high to close at 58,078, up 71 points, forming a bearish candle with a long upper and minor lower shadow on the daily timeframe. This indicates pressure at higher levels and intraday volatility.
This candlestick formation reflects hesitation among traders to chase prices at record highs. Despite the intraday reversal, the index continues to trade above its key moving averages, suggesting that the broader uptrend remains intact.
However, the emergence of a bearish candle at lifetime highs calls for caution, and traders may look for confirmation in the coming sessions before initiating fresh long positions, advised Sudeep Shah, Head – Technical Research and Derivatives, SBI Securities.
As for crucial levels, the 57,600–57,500 zone will act as an important support for the index, while 58,300–58,400 will serve as a crucial hurdle, he added.
Meanwhile, the India VIX, the volatility or “fear index,” climbed 3.85 percent to 11.73 and sustained above its short- and medium-term moving averages. This signals some caution, though not a major concern, as long as the index stays below the 13 zone.
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