The Nifty 50 largely remained within the previous day's trading range, defending the 25,150 level, and closed with a second-tenth of a percent loss on October 13, despite renewed US-China trade war concerns. Overall, it was a choppy trading session for the market, while the broader trend remains positive, supported by favourable technical and momentum indicators.
According to experts, rangebound trading may continue in the immediate term, with a crucial support zone between 25,000 and 24,900. As long as this support holds, bulls are likely to push the Nifty 50 toward 25,450-25,500, the immediate key resistance levels. If the index breaks above this resistance, a new leg of upward movement may follow.
The Nifty 50 opened more than 100 points down and remained rangebound throughout the session. However, the index started to recover in the last couple of hours of trade and finished the session at 25,227, down 58 points (0.23 percent), forming a bullish candle on the daily charts.
Technically, this market action suggests a choppy movement or minor downward correction in the market. The larger-degree higher tops and bottoms are still intact on the daily/weekly charts, and the recent upmove could align with the formation of a new higher top in the sequence.
According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the short-term trend of the Nifty is choppy, but the underlying medium-term trend remains positive. "Any further weakness from here could find support around the 25,000 levels before bouncing back from the lows. Immediate resistance is placed at the 25,500 levels," he said.
The RSI tilted down to 58.5 but maintained a bullish crossover. The MACD and histogram remained strong on the daily charts, and on the weekly scale, the MACD is on the verge of a positive crossover, with the histogram's weakness fading.
The weekly options data suggested that the Nifty 50 is expected to trade in the 25,000-25,500 range in the short term.
The maximum Call open interest was observed at the 25,300 strike, followed by the 25,500 and 25,400 strikes, with the maximum Call writing at the 25,250, 25,300, and 25,200 strikes. On the Put side, the 25,200 strike holds the maximum open interest, followed by the 25,000 and 25,100 strikes, with the maximum Put writing at the 25,200, 25,150, and 25,000 strikes.
Bank Nifty
The Bank Nifty outperformed the benchmark Nifty 50, rising 15 points to 56,625 and forming a small bullish candle with a minor upper shadow, indicating a positive trend. The index sustained above the falling resistance trendline, supported by healthy technical and momentum indicators, and may be inching toward the 56,800-57,000 range in the short term.
"The zone of 56,800-56,900 will act as a crucial hurdle for the index. Any sustainable move above the 56,900 level will trigger a sharp upside rally up to the 57,500 level," said Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities.
On the downside, the 56,300-56,200 zone will act as important support for the index, he added.
Meanwhile, the India VIX, which measures expected market volatility, spiked sharply by 8.96 percent to 11.01 after six days of consolidation, which may cause slight discomfort for bulls.
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