Near term outlook remains weak… – Samco

Nifty Holds Near 20-Day SMA; Bank Nifty Slips Below 55,000 as Call Writers Gain Control

Om Mehra, Technical Research Analyst, SAMCO Securities

Nifty closed at 22,811.35, down 0.34%, holding marginally above its 20-day simple moving average. Bank Nifty declined 0.92% to 54,976.90, slipping below 55,000 and its 20-day average. Derivatives positioning showed a bias towards Call writers in both indices, while rising volatility signalled greater caution.

Nifty Outlook: 20-Day SMA Remains Crucial

Nifty opened with a gap up and advanced to 23,121, near its earlier Supertrend reference, before selling pressure pushed it towards 22,650. It subsequently recovered partially, forming a bearish candle with shadows reflecting the session’s wide trading range.

The index remains just above its 20-day SMA, making this average an important reference for whether the decline remains a consolidation or develops into further weakness.

RSI at 46 indicates subdued momentum below the neutral 50 level. Meanwhile, India VIX rose 6.01% to 15.66, approaching its October highs and signalling increased expectations of market volatility.

Nifty Options Data: 23,000 Emerges as a Major Hurdle

Fresh Call writing was concentrated between 22,800 and 23,200, led by the 23,000 strike. Put additions were comparatively modest between 22,600 and 22,750, while Put unwinding at 23,000 suggested reduced support at that strike.

The highest Call open interest was at 23,000, followed by 23,200 and 23,100. Put open interest was highest at 22,500, followed by 22,700.

The Put-Call Ratio declined to 0.70 from 0.88, reinforcing the relative dominance of Call positioning. This supports a cautious interpretation, although options positioning can change during subsequent sessions.

What Are Nifty’s Support and Resistance Levels?

Nifty’s near-term bias remains sideways to cautious below 23,000. A sustained recovery above 22,900 would bring 23,000 into focus. A break below 22,650 could expose the next support at 22,500.

Bank Nifty Outlook: Moving-Average Breakdown Weakens Structure

Bank Nifty closed at 54,976.90, falling below both the psychological 55,000 level and the 38.2% Fibonacci retracement reference at 55,200.

The decline extended the weakness following the previous session’s evening star pattern. The index also slipped below its 20-day SMA and remained below the other tracked moving averages, indicating a weaker technical structure.

Private lenders led the decline: Nifty Private Bank fell 1.05%, compared with a 0.51% fall in Nifty PSU Bank.

The rupee remained firmer, with USD/INR at 94.45, moving towards the lower end of its indicated range near 94.06. Currency strength, however, did not translate into support for banking shares.

Bank Nifty Options Data: 55,000 Is the Immediate Pivot

Call writers added positions between 55,000 and 55,700, while Put unwinding was observed at 55,500 and 54,500.

The 55,000 strike held the highest open interest on both the Call and Put sides, making it an important positioning reference. Substantial Call open interest at 55,500 adds another overhead hurdle.

The Put-Call Ratio eased to 0.89 from 0.96, indicating a shift towards relatively stronger Call positioning.

What Are Bank Nifty’s Support and Resistance Levels?

Bank Nifty remains sideways to weak below 55,000. Reclaiming that level would be the first sign of stabilisation, while a sustained move above 55,200 would improve the recovery structure. Below 54,700, attention shifts towards 54,500.

Key Questions on Nifty and Bank Nifty

What is Nifty’s immediate support?
Nifty’s immediate support is 22,650, followed by 22,500.

Why is 23,000 important for Nifty?
The 23,000 strike has the highest Call open interest, making it a significant derivatives-based resistance reference.

What would improve Bank Nifty’s outlook?
Bank Nifty needs to reclaim 55,000 and sustain above 55,200 to improve its immediate technical position.

What does the rise in India VIX indicate?
India VIX at 15.66, up 6.01%, indicates higher expected volatility. It does not independently predict market direction.

Market Outlook Summary

Nifty is defending its 20-day SMA, with support at 22,650 and resistance at 22,900–23,000. Bank Nifty’s structure is weaker following its decline below 55,000 and the 20-day SMA. Falling Put-Call Ratios and rising volatility favour a cautious approach until price action confirms a sustained recovery.