Market Analysis: Key Trading Levels and Trends Ahead of Thursday’s Opening Bell

The financial markets continued their downward trajectory on October 16, with the Nifty 50 index falling below the 25,000 threshold. The index closed at 24,971.30, marking a loss of 86 points amid rangebound trading. For the past six days, the index has been oscillating between 24,900 and 25,200, failing to breach this range decisively.

Experts suggest that a breakout beyond 25,200 could propel the Nifty towards a 25,400 target. Conversely, a decline below 24,900 may lead to further declines, potentially dragging the index into the 24,800-24,700 zone. The technical trend has shown the formation of a small bearish candle with shadows above and below, indicating indecision among investors.

Key resistance levels for the Nifty have been identified at 25,062, 25,105, and 25,176, while support is detailed at 24,920, 24,877, and 24,806. The Nifty has not been able to maintain levels above the 50-day Exponential Moving Average (EMA), though it has managed to defend the 24,900 mark on both an intraday and closing basis.

Similarly, the Bank Nifty index noted a slight gain, marked by a small bullish candle. It recorded a decline of 105 points to settle at 51,801. Resistance levels for this index are pegged at 51,970, 52,046, and 52,168, with support seen at 51,726, 51,650, and 51,528.

Options data indicates that the 25,500 strike price holds maximum open interest for Nifty, signaling it as a significant resistance level. In contrast, the 24,500 strike reflects maximum open interest on the Put side, indicating strong support.

The Put-Call ratio (PCR) for the Nifty decreased to 0.74, suggesting a shift in market sentiment from the previous day’s 0.77. An increased PCR often implies bullish market expectations.

Market volatility, as indicated by the India VIX, saw a slight increase but remained below key moving averages, ending at 13.05, up marginally from 13. Despite this, the fear index stayed at levels conducive for market bulls.

The daily trading session saw a long build-up in 34 stocks and a decline in open interest (OI) and prices in 47 stocks, indicating long unwinding. Meanwhile, 65 stocks experienced an increase in OI and decreasing prices, suggesting a buildup of short positions.

A number of stocks remain under the Futures and Options (F&O) ban, reflecting that these securities have surpassed 95% of the market-wide position limit. Notable stocks include Bandhan Bank and Tata Chemicals, among others.