On October 30, the Nifty 50 surged 116 points, or 0.51 percent, to close at 23,053, while the Bank Nifty declined 223 points, or 0.41 percent, to settle at 54,687. Market breadth turned negative, with 2,383 stocks declining against 881 advancing on the NSE.
Jatin Gedia, Technical Research Analyst, VP, Derivatives & Technical Research at Teji Mandi
The Nifty 50 held the 22,400-22,500 support zone and rallied more than 700 points to close above the 23,000 mark. On the monthly and weekly charts, the index respected and closed above its 40-month exponential moving average (EMA), placed at 22,803, as well as the rising support trendline drawn by connecting the previous swing lows of 21,743 and 22,182, respectively. The ability to hold crucial support levels despite global headwinds indicates underlying bullish sentiment.
The previous swing high and the 38.2 percent Fibonacci retracement level of the decline over the previous three months, from 24,774 to 22,180, are placed at 23,170. We expect the Nifty to break above this resistance and move higher towards 23,477, which represents the 50 percent Fibonacci retracement level of the same decline. The support base has shifted higher from 22,500 to 22,680. Daily and hourly momentum indicators are also aligned, with positive crossovers supporting the bullish price action.
On the derivatives front, the maximum Call open interest is concentrated at 23,500, while the maximum Put open interest is placed at 22,000, followed by 22,500. Put writers added open interest at strikes between 22,800 and 23,000, indicating the emergence of support, while Call writers unwound their positions across the same strikes. Consequently, the Put-Call Ratio (PCR) increased from 1.41 to 1.61.