The Indian stock market is gearing up for a lower opening on Thursday, following unfavorable global cues driven by escalating tensions in the Middle East. Investors are particularly concerned about the potential for a full-scale conflict between Iran and Israel, which is creating a ripple effect across global financial markets.
Market indications from the Gift Nifty support this outlook, suggesting a gap-down start for the Indian benchmark indices. Currently, the Gift Nifty is trading around the 25,720 mark, reflecting a discount of nearly 255 points from the previous close of Nifty futures.
In the previous session, Indian indices experienced volatility but ended on a notably flat note, with a negative bias underneath the surface.
On Tuesday, the Sensex dipped by 33.49 points, concluding at 84,266.29. Meanwhile, the Nifty 50 finished 13.95 points, or 0.05%, lower at 25,796.90, illustrating the cautious sentiment among traders.
The Nifty 50 has established a small candle on its daily chart, showing an upper shadow, which may signal indecision or reluctance to push higher.
“This candlestick pattern implies a ‘sell on the rise’ opportunity. However, the anticipated follow-through selling momentum was noticeably absent on Tuesday. Despite this setback, the bullish trend characterized by higher tops and bottoms remains intact, although confirmation of the current weakness in the market is necessary,” explains Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
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Shetti maintains that the short-term uptrend of the Nifty 50 remains intact. He predicts that Nifty may find support around the 25,500 to 25,400 levels this week and could recover from these lows, offering potential buying opportunities.
Let’s delve into what to expect from the Nifty 50 and Bank Nifty today:
Nifty OI Data
Analysis of Nifty open interest (OI) reveals that the highest call-side OI is positioned at the 26,000 and 26,200 strike prices, while the put-side OI remains concentrated at the 25,500 strike price. This indicates robust support around the 25,600 mark for the Nifty, according to Mandar Bhojane, Technical Research Analyst at Choice Broking.
Nifty 50 Prediction
On October 1, the Nifty 50 oscillated within a narrow range before ultimately closing 13 points lower.
“The Nifty 50 formed a ‘doji’ pattern with a long upper shadow on the daily chart, signaling market indecision. Significant call writing at the 25,800 level indicates that this could serve as a formidable resistance point. Immediate support is seen at 25,750, and a decisive breakdown may push the index to the 25,600 or 25,500 levels. Conversely, if the index climbs above 25,800, it could rally towards 26,050, where selling pressure may re-emerge,” explains Rupak De, Senior Technical Analyst at LKP Securities.
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According to VLA Ambala, Co-Founder of Stock Market Today, the Nifty 50 index has exhibited a bearish “Dark Cloud Cover” candlestick pattern at its all-time highs.
“The index remains in the overbought zone, with its monthly RSI exceeding 83. Following a near 2% drop over three trading sessions, current movements suggest increased profit-booking activities. From an analytical perspective, I recommend adopting a ‘sell on the rise’ strategy. Since Nifty is currently trading about 1% from its 20-day exponential moving average (EMA), traders can target this range for potential profits. I advise tracking this over the next 1-3 days to capitalize on recent developments,” Ambala suggests.
Given these perspectives, she anticipates that the benchmark Nifty 50 will find support between the 25,700 and 25,550 levels, while resistance may emerge between 25,830 and 25,925.
Dr. Praveen Dwarakanath, Vice President of Hedged, notes that the Nifty 50 has consolidated near its previous closing, indicating a temporary pause in the downward trend. He identifies Tuesday’s low at 25,740 as immediate support for the index.
“The ADX DI+ line on the daily chart is nearing a crossover with the ADX average line, which may signal a continuation of market weakness. Additionally, momentum indicators are indicating limited downside potential as they approach the oversold region. The options writers are also displaying increased call writing above the 25,800 mark, which could imply a likely close below that level,” Dwarakanath adds.
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Bank Nifty Prediction
In the recent session, the Bank Nifty index declined by 55.50 points, or 0.1%, closing at 52,922.60, forming a small bullish candlestick pattern.
“The Bank Nifty has tested support at the 52,800 level; a breach of this support could potentially lead to further declines towards 52,000 or 51,200 levels. Current momentum indicators suggest limited downside potential, as recent declines have pushed these indicators into the oversold region,” Dwarakanath mentions.
Data from options writers in Bank Nifty indicate increased writing at the 53,000 levels, signaling a slowdown in the current decline, however, the rise in call writing suggests continued weakness, positioning the bias in Bank Nifty towards a sideways to downward trend.
Disclaimer: The views and recommendations presented in this analysis are those of individual analysts or brokerages and should not be construed as financial advice from this publication. Investors are encouraged to consult certified experts before making any investment decisions.
