Technical View: Samvat 2081 and November series start on positive note but caution prevails until Nifty decisively surpasses 24,500

Nifty Technical View

The Nifty 50 had a good start to Samvat 2081 as well as the November series on November 1, the Diwali Muhurat trading day. However, participants remain cautious until the index decisively surpasses 24,500, as they keenly await two major global events: the US elections and the Federal Reserve's interest rate decision scheduled for next week. Volatility has hit a fresh two-and-a-half-month high. Overall, the index has been range-bound between 24,000 and 24,500 for more than a week, and this trend may continue until it breaks out of this range in either direction, according to experts.

The Nifty 50 opened nearly 100 points higher at 24,303 and remained in positive territory throughout the trading session. The index finished at 24,304, up 99 points, forming a Doji candlestick pattern on the daily charts, which indicates indecision among bulls and bears about the market's further trend.

Friday’s Muhurat trading was largely retail-driven, with strong buying interest seen in PSU, auto stocks, and mid-smallcaps. "The Nifty index managed to stay above 24,250. However, the real test for Nifty will come on Monday when FIIs return. The saviour of Indian stocks, DIIs, will also be present to support the market," said Rupak De, Senior Technical Analyst at LKP Securities.

Technically, according to him, support is placed at 24,000, which should keep the bulls safe, while resistance is seen at 24,500, above which bulls could gain more strength.

For the week, the index also formed a Doji-like candlestick pattern but managed to defend the previous week's low of 24,074.

On the weekly options front, maximum call open interest was seen at the 24,800 strike, followed by the 24,300 and 25,000 strikes, with maximum call writing at the 25,000 strike, and then at the 24,400 and 24,900 strikes. On the put side, the 24,300 strike holds the maximum open interest, followed by the 24,200 and 24,000 strikes, with maximum writing at the 24,300 strike, and then at the 23,700 and 23,800 strikes.

The above options data indicate that 24,300 is expected to be a key level to watch, with support at 24,000 and resistance at 24,800.

Nifty Bank

The Bank Nifty also closed higher, up 199 points at 51,674, and formed a small bullish candlestick pattern with a minor upper shadow. The index traded within the previous day's range and could not sustain above the 20 and 50-day EMAs (Exponential Moving Averages).

Overall, the index has been consolidating within a defined range of 50,500 to 52,500, and a breakout beyond this range is essential for confirming a new trend, according to Virat Jagad, Technical Research Analyst at Bonanza.

The RSI (Relative Strength Index) remains near the midline, aligning with the ongoing range-bound movement. Additionally, the index is trading around its major EMAs, further supporting the view of consolidation within the current range, according to him.

The Bank Nifty also held last week's low and traded within the previous week's range, rising 1.75 percent with strong volumes to close above the 20-week EMA (51,212).

Volatility has maintained its upward journey for the fourth consecutive session, hitting a fresh two-and-a-half-month high, which makes the bulls more uncomfortable now. The India VIX rose by 2.27 percent to 15.9, the highest level since August 13, while for the week, it rallied 8.68 percent, extending its upside for another week.

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