Nifty’s Resilience Amidst Global Factors
On October 10, the Nifty staged a wise recovery, erasing the day’s losses thanks to favourable global signals, increases in real estate names, and a higher closing price. The Israel-Hamas confrontation appears to have been tolerated by the market for the time being.
This blog provides an in-depth examination of Nifty 50’s recent performance, elucidating crucial developments and offering insights into its prospective trajectory.
Riding the Positive Wave
Nifty 50 exhibited remarkable resilience on October 10, staging a remarkable comeback from previous setbacks. Several factors contributed to this optimistic surge, including favorable global cues and robust gains in the real estate sector. Interestingly, even amidst global conflicts such as the Israel-Hamas tension, Nifty 50 stood its ground.
Unpacking Nifty’s Day Performance
The trading day kicked off on a promising note, with Nifty 50’s opening at 19,566, marking the day’s lowest point. As the trading session unfolded, the index steadily ascended, reaching an intraday peak at 19,718 before ultimately closing at 19,690. This substantial upswing translated to a gain of 178 points, equivalent to 0.91 percent, compared to the preceding trading day.
Key Technical Milestones
One of the standout technical achievements was Nifty 50’s successful breach of crucial resistance levels. Notably, it not only surpassed the 50-day exponential moving average (EMA) of 19,560 but also convincingly traversed the 20-day EMA (19,650) – all within a solitary trading session. This bullish ascent was complemented by the formation of a distinct pattern known as the Opening Marubozu pattern, symbolizing a robust bullish presence in Dalal Street.
Glimpsing into Nifty’s Future
Market pundits posit that a resolute breakthrough above the day’s high, situated at 19,718, has the potential to propel Nifty 50 towards the coveted 19,800-20,000 range in the forthcoming sessions. However, a word of caution: markets are inherently laden with risks. In this context, 19,300 emerges as a pivotal support level warranting vigilant monitoring by investors.
Nagaraj Shetti, a technical research analyst at HDFC Securities, pointed out the recent formation of a lengthy bull candle on the daily chart. This signals an endeavor towards an upside breakout following a minor dip. Notably, Shetti emphasized the significance of the recent swing low at 19,333 as a potential short-term bottom-reversal pattern. According to Shetti, a stride beyond the 19,700 levels is likely to navigate the index towards the coveted 19,950-20,050 range, with immediate support at 19,550.
Options Landscape: A Closer Look
By examining the options landscape, it becomes evident that market participants have strategically positioned themselves. The maximum Call open interest was observed at the 20,000 strike, followed by the 19,800 strike. Noteworthy Call writing was observed at the 20,100 and 20,000 strikes. Conversely, the maximum Put open interest was recorded at the 19,600 strike, followed by the 19,500 strike, with substantial Put writing observed at the 19,600 and 19,700 strikes.
This options data suggests that Nifty 50 may potentially encounter resistance in the 19,800-20,000 range in upcoming sessions, with immediate support identified at the 19,600-19,500 zone.
Concluding Thoughts on Nifty 50
In conclusion, Nifty 50’s recent technical performance is indeed noteworthy. The successful breach of pivotal resistance levels, coupled with favourable market sentiment, positions the index for further growth. Nevertheless, investors must exercise caution and diligently monitor support and resistance levels. In the ever-evolving financial landscape, staying informed and adaptable remains the cornerstone of successful investment.
Source – Money control
Disclaimer: The information in this “Stock Profile” blog post is for informational purposes only. It is not financial advice. Always consult a qualified expert before making investment decisions.