NIFTY50 closed the previous week with over 2.3% losses, wiping out gains from the prior week. On October 26, traders and investors are watching closely to see if the index can defend the 22,500 support level amid subdued market conditions.
- NIFTY50 traded below its 20 and 50 hourly exponential moving averages (EMA), signaling weak price action.
- GIFT NIFTY futures indicated a muted start, trading 8 points lower on Monday morning.
- Brent crude oil prices fell sharply by 6%, easing some pressure on Indian markets.
- Global markets showed weakness, with Wall Street closing mostly in the red last week.
- Technical support for NIFTY50 lies near 22,372, while resistance is around the daily 20 EMA at 22,840 and weekly 200 EMA.
- Open interest data for the October 27 weekly expiry suggests a trading range between 22,500 and 23,000.
What is the current technical condition of NIFTY50?
On the hourly charts, NIFTY50 continues to trade below the 20 and 50 EMA, which indicates subdued price action and a lack of strong upward momentum in the near term. The index also fell below the weekly 200 EMA last week, signaling sustained bearishness.
However, the index found support near the swing low trend line at 22,372, which acts as a near-term floor on the downside. On the upside, the daily 20 EMA level at 22,840 remains a significant hurdle for bulls trying to regain strength.
How are GIFT NIFTY futures and crude oil prices influencing the market?
GIFT NIFTY futures traded 8 points lower on Monday morning, suggesting a muted start for the NIFTY50 index. Meanwhile, Brent crude oil prices plunged 6%, which could help improve investor sentiment in India by reducing input costs for many companies.
Despite geopolitical concerns such as potential strikes on Iran and ongoing tensions in the Middle East, the sharp fall in crude prices provides some relief to the market.
What is the impact of global markets on NIFTY50?
Wall Street ended the previous week mostly in the red, with the Dow Jones falling over 650 points and the S&P 500 down 0.5%. The NASDAQ 100 also closed lower after erasing early gains. These declines were driven by worries over debt financing for AI infrastructure and concerns about overvalued stocks.
Asian markets opened the week negatively as well, with Taiwan’s benchmark index dropping 1.9% and Japan’s Nikkei and Korea’s KOSPI falling around 1%. Hong Kong’s Hang Seng index was an exception, trading in green.
What do open interest data and expiry trends suggest?
For the weekly expiry on October 27, open interest data indicates a broad trading range between 22,500 and 23,000. The highest open interest in call options is at 23,000, marking strong resistance. On the other hand, the highest open interest in put options is at 22,500, indicating strong support at that level.
Additionally, open interest additions in 22,700 and 22,800 call options suggest limited upside potential for the index in the near term.
Disclaimer: Derivatives trading involves significant risk and should only be undertaken by those who fully understand these risks and apply strict risk management strategies such as stop losses. This article does not recommend any specific stocks, securities, or trading strategies. The securities mentioned are for illustrative purposes only.
