The Indian stock market is showing signs of a positive opening on Monday, buoyed by encouraging movements in global markets. Investors are hopeful that this momentum may lead to a turnaround in the recent trends observed in the domestic indices, Sensex and Nifty 50.
Data from Gift Nifty suggests a mildly optimistic start for the Indian benchmark index. As of the latest trading, the Gift Nifty was hovering around 25,085, reflecting a premium of nearly 35 points over the prior close of Nifty futures.
On Friday, the Indian equity market faced a downturn, with the Nifty 50 closing below the critical 25,000 mark. This decline raised concerns about the resilience of market sentiment.
The Sensex fell by 230.05 points, finishing at 81,381.36, while the Nifty 50 closed at 24,964.25, down by 34.20 points or 0.14%.
Technical analysis from Friday reveals that the Nifty 50 formed a small negative candle on the daily chart, indicating a continuation of narrow range movements. The day’s trade saw a high-low range of just around 108 points.
Nagaraj Shetti, a Senior Technical Research Analyst at HDFC Securities, suggests that recent price action indicates a potential for bulls to regroup after a week of significant bearish momentum. The formation of high wave patterns implies that selling pressure may be easing, which could pave the way for a rebound.
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Shetti further indicated that while the Nifty 50 is currently in a volatile zone near the crucial support level of 24,500, there exists a strong likelihood of an upside bounce from this or other support levels.
Here’s what to observe in the Nifty 50 and Bank Nifty indices today:
Nifty 50 Prediction
The Nifty 50 exhibited narrow range movements on October 11, declining by 34 points. Analysts are watching key levels closely.
According to Aditya Agarwal, Head of Derivatives & Technical Analysis at Sanctum Wealth, call writing at the 25,000 and 25,200 strike prices will serve as robust supply zones. He advises taking profits if the index approaches levels of 25,200 or 25,320. On the downside, 24,900 and 24,840 offer strong support, marking a consolidation phase for the index between 24,800 and 25,320.
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Dr. Praveen Dwarakanath, Vice President at Hedged.in, noted that the Nifty 50 breached the previous day’s low and was sold off from its peak, suggesting weakness is establishing itself in the index.
He identified a doji candle formation, which indicates indecisiveness in market sentiment. Momentum indicators are hinting at further declines, supported by increased call writing at the 25,000 mark, leading to a potential sideways to bearish bias.
VLA Ambala, Co-Founder of Stock Market Today, warns investors of a potentially bearish outlook in the upcoming days and recommends a “sell on rise” strategy amidst downtrends.
According to Ambala, the Nifty’s Relative Strength Index (RSI) readings are 41 daily, 59 weekly, and 74 on a monthly basis, indicating varying strength levels. He predicts support around 24,820 and 24,675, with resistance seen at 25,120 and 25,245.
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Bank Nifty Prediction
The Bank Nifty experienced profit booking from its highs on Friday, closing down by 358.60 points, or 0.70%, at 51,172.30. Market watchers are closely observing its movements.
Dwarakanath indicated that Bank Nifty also fell below its previous low and saw selling pressure from its daily peak. The stochastic oscillator nearing the overbought territory raises concerns of a potential decline in the index.
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He highlighted that immediate support for Bank Nifty is at the 50,200 level, with options data showing increased call writing above 51,000 and 51,500 levels that could hint at downside risks ahead.
Agarwal stated that despite the recent negative sentiment, the short-term outlook for Bank Nifty is still positive, suggesting that corrections towards 51,000 or 50,800 should be viewed as buying opportunities.
However, he advises caution as moves beyond 51,000 or 52,200 could be an opportunity to lock in profits, stressing that a close below 50,400 would negate any bullish sentiment, potentially triggering further declines to 50,000 or 49,600 levels.
Disclaimer: The perspectives and recommendations shared are attributed to individual analysts and broking houses, not representing the views of this platform. We advise investors to consult certified professionals before making investment decisions.
