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Below the Quote on Nifty Weekly Outlook 05-10-2024 by  Mandar Bhojane Technical Research Analyst Choice Broking

The Indian equity markets concluded their fifth consecutive session in the red on October 4, with the Nifty closing around 25,000, down by 235.50 points or 0.93%. From its recent life-highs, the Nifty has corrected nearly 1,300 points, which represents a 5% drop. Notably, the index has broken below both the 20-day and 50-day exponential moving averages (EMA), closing beneath these key short-term indicators. This breakdown signals a strong bearish momentum likely to continue into the upcoming week.

On the weekly chart, Nifty has formed a significant bearish candlestick pattern, further supporting the possibility of sustained downward pressure. If the index breaches and sustains below the 25,000 level, there is potential for further correction toward the 100-day EMA, which is positioned around the 24,375 level. In the near term, 24,800 will act as a critical support zone, while a failure to hold above this level may intensify the selling pressure.

The current technical trend suggests a "sell on rise" strategy, with fresh buying opportunities likely to emerge only if the Nifty decisively moves above the 25,500 zone.

Momentum indicators also align with the bearish outlook. The Relative Strength Index (RSI) is currently at 40 and trending downward, indicating weakening strength. Meanwhile, the Moving Average Convergence Divergence (MACD) has shown a negative crossover at overbought levels, further signaling bearishness in the market.

In terms of the options data, significant Open Interest (OI) on the put side is concentrated around the 24,500 level, indicating strong support. On the call side, notable OI concentrations are observed at the 25,400 and 25,500 levels, suggesting these will act as resistance zones in the near term. Traders are advised to remain cautious, maintain strict stop-losses, and avoid holding long positions overnight to mitigate risks arising from market volatility.

Nifty Outlook

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