Technical View: Nifty snaps 4-week gains, bears can challenge 25,500 if Nifty breaks 25,670 level; Bank Nifty near key support

Nifty outlook for November 03

The Nifty 50 witnessed follow-through selling on October 31 as bears held fort, extending the downward journey for the second consecutive session, with a continuation of the bearish bias in momentum indicators. During this fall, the index broke below the 10-day EMA and reached the lower end of the 25,700–26,100 range, which it had been trading within for more than a week.

If the index decisively breaks below 25,700 or 25,670 (June swing high), bears could challenge 25,600 (20-day EMA), followed by 25,500 — a crucial support level that coincides with the midline of the Bollinger Bands. On the higher side, 25,900–26,000 is expected to act as an immediate hurdle, according to experts.

After opening lower, the Nifty 50 rebounded and climbed up to 25,954 but could not sustain those gains for long. By the end of the initial hour of trading, the index turned lower and extended its downtrend as the day progressed. It closed at 25,722, down 156 points (0.6 percent), forming a bearish candle with an upper shadow on the daily chart — indicating weakness and selling pressure at higher levels.

On a weekly basis, the index snapped its four-week winning streak, declining 0.28 percent and forming a bearish candle with a long upper shadow on the weekly timeframe, accompanied by above-average volumes — signaling significant pressure at higher zones.

The momentum indicators have also been losing strength. The RSI stands at 57.84, while the Stochastic RSI continues to sustain a bearish crossover. The MACD has also inched downward with a declining histogram (though still slightly above the zero line), indicating fading momentum.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the short-term trend of the Nifty is weak, though the overall medium-term trend of the market remains positive.

“Any slide below the 25,700 level is expected to find strong support around the 25,500 level, and there is a higher possibility of a sharp upside bounce from the lows by next week,” he said.

Weekly options data also indicates that the Nifty is expected to remain in the 25,500–26,100 range in the short term.

The maximum Call open interest remains at the 26,000 strike, followed by 25,900 and 26,100, with the highest Call writing seen at the 25,800, 25,900, and 26,000 strikes. On the Put side, the 25,700 strike holds the maximum open interest, followed by 25,500 and 25,800, with the highest Put writing at the 25,700, 25,800, and 25,750 strikes.

Bank Nifty

The Bank Nifty was also weak for another session, falling 255 points (0.44 percent) to 57,776 on Friday, though it managed a 0.13 percent gain for the week. The banking index formed a bearish candle with a long upper shadow on the daily timeframe, accompanied by above-average volumes, indicating selling pressure at higher levels. On the weekly chart, it formed a small bearish candle with a very long upper shadow, resembling a Gravestone Doji-like pattern — a bearish reversal formation that requires confirmation in the following week.

Momentum indicators also signaled caution. The RSI (at 62.29) and Stochastic RSI maintained a bearish crossover, while the MACD is on the verge of a negative crossover. The histogram has been gradually declining and remains just above the zero line, indicating fading momentum.

“On the downside, immediate support for Bank Nifty is seen near 57,630. A firm break below this level could extend weakness towards 57,000, while the major hurdle for Bank Nifty is positioned around 58,580. As long as the index remains below 58,580, traders are advised to book profits on bounces,” said Hrishikesh Yedve, AVP, Technical and Derivative Research at Asit C. Mehta Investment Intermediates.

Meanwhile, the India VIX, the fear gauge, continued its upward move, rising 0.7 percent to 12.15 and moving above the 20-, 50-, and 100-day EMAs — indicating increasing caution for the bulls.

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