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NIFTY

Equity benchmark indices rebounded on Friday after three consecutive days of decline, driven by buying in banking, financial services, and metal stocks. However, the broader markets outperformed the benchmark indices. On October 18, the BSE Sensex closed 218.14 points higher at 81,224.75, after recovering more than 800 points from the day's low of 80,409.25. Meanwhile, the NSE Nifty rose by 104.20 points to settle at 24,854.05.

Nifty broke the head-and-shoulders pattern today and staged a strong reversal from the key 24,600 support zone, forming a bullish piercing pattern. This indicates the potential for a bullish reversal. Additionally, Nifty retested the rising trend line, with 25,000 and 25,200 acting as immediate resistance levels. On the downside, 24,600 and 24,400 will serve as immediate support levels. If Nifty closes decisively above the 25,000 level, it may further rally towards 25,400 and 25,800 in the short term.

The RSI is currently at 41, showing signs of reversal from the oversold region, and bullish divergence in the RSI suggests a possible bullish reversal. Moreover, Nifty is taking support from the 100 EMA, indicating strong upward momentum.

An analysis of Nifty's options reveals significant open interest (OI) at the 25,500 level on the put side, signaling potential support at that level. On the call side, notable OI concentrations are observed at the 25,000 and 25,500 levels. Traders and investors are advised to look for buying opportunities on Nifty dips, with appropriate stop-loss strategies placed below the identified support levels.

Support Levels: 24600 - 24400    

Resistance Levels: 25200-25400

Overall Bias: Sideways to Bullish

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