The NSE Nifty 50 is expected to open lower on Oct 26, Monday, amid a sharp rise in crude oil prices, dissuadin an upside. While technical indicators suggest the benchmark index has key support near the 22,500 zone.
Indian equity benchmarks ended lower on Friday after giving up their morning gains, although both indices recovered some ground from their provisional closing levels in the final settlement.
The Nifty 50 settled 87.65 points, or around 0.39%, lower at 22,600, while the Sensex fell 125.56 points, or 0.17%, to 73,123.83.
The Nifty 50 recovered 83.60 points from its provisional close of 22,516.40, while the Sensex gained back 228.88 points from its provisional closing level of 72,894.95.
The Nifty’s recovery attempt was stopped at the 38.2% Fibonacci retracement level of its previous decline closer to 23,200 level, spurring another wave of selling that pushed the benchmark index back into negative territory, according to SBI Securities.
The 22,200 level is a crucial support for the index , a decisive breakdown could trigger another leg of selling according to Vatsal Bhuva, technical analyst at LKP Securities.
“Immediate support is placed at 22,500, while resistance lies at 22,700–22,800,” he said.
He advised traders to remain cautious, trade strictly around key levels, keep positions light, and monitor Brent crude.
“A rise above $110 could further dampen market sentiment,” Bhuva stated.
Turning to Nifty, the index continues to trade comfortably below its crucial moving averages. The daily RSI is also declining and approaching the key 40 mark, which could further weaken the momentum if breached. With the benchmark index showing signs of renewed weakness, all eyes are now on the crucial support levels that could determine the extent of the next move.
From a technical perspective, the 22,350-22,300 zone is expected to provide crucial support, according to SBI Securities.
However, a sustained break below 22,300 could intensify selling pressure and drag the index towards the 22,000 mark. On the upside, the 22,800-22,850 zone, coinciding with the 20-day EMA, is likely to act as an immediate hurdle.
The 22,200 level is a crucial support for the index, and a decisive breakdown could trigger another leg of selling, according to Vatsal Bhuva, technical analyst at LKP Securities.
“Immediate support is placed at 22,500, while resistance lies at 22,700-22,800,” he said.
He advised traders to remain cautious, trade strictly around key levels, keep positions light, and monitor Brent crude.
“A rise above $110 could further dampen market sentiment,” Bhuva stated.
Bank Nifty
Bank Nifty closed with bearish candlesticks on both daily and weekly charts, indicating sustained selling pressure. The lower-high formation remains intact, reflecting weakness in the overall price structure, according to Bhuva.
“Additionally, the index is trading below its 20-DMA and 50-DMA, highlighting bearish sentiment across the short- and medium-term trends,” Bhuva said.
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The immediate support is placed at 53,800, and a decisive breakdown could trigger another leg of selling, he said. On the upside, 54,800 will act as resistance.
“Index traders should maintain a sell-on-rise strategy and adopt a cautious, level-based trading approach until the technical structure improves,” Bhuva added.