Tuesday's Pre-Market Outlook: Key Insights for the Trading Day Ahead

On September 29, the market managed to recover more than half of its losses from the previous day, marking the first day of the October F&O series. The Nifty50 closed within the range of the previous day and formed a bullish candlestick pattern known as a bullish harami pattern on the daily charts. This pattern, observed during a downtrend, suggests the possibility of a rise in the upcoming sessions.

The Nifty50 faced consistent resistance at the 19,750 level, which is seen as a crucial level for further upside. Failure to breach this level could push the index down towards 19,500, according to experts.

The BSE Sensex rose by 320 points to reach 65,828, and the Nifty50 gained 115 points to close at 19,638 after a significant decline the previous day.

Ashwin Ramani, a derivatives and technical analyst at SAMCO Securities, noted that the Nifty formed a bullish harami candlestick pattern on the daily chart, finding support at the 50-day exponential moving average (DEMA) of 19,562 and subsequently moving higher. He also highlighted strong Put writing at the 19,500 and 19,600 strikes, which contributed to the Nifty's upward movement. Ramani emphasized that the 19,500 level on the downside and the 19,800 level on the upside are key levels to watch for, as a decisive break in either direction will provide insights into the index's future direction.

The broader markets rebounded as well, with the Nifty Midcap 100 and Smallcap 100 indices both rising by approximately 1%. Positive breadth was observed at a 2:1 ratio. Additionally, the India VIX, which measures expected volatility in the Nifty50 for the next 30 days, fell by 10.68% to 11.45 levels from 12.82 levels, supporting the overall bullish sentiment.

Key support and resistance levels for the Nifty are as follows:

• Support levels: 19,572, 19,530, and 19,463.

• Resistance levels: 19,705, 19,747, and 19,814.

Regarding the Nifty Bank, it recovered most of its losses from the previous day, closing with a gain of 284 points at 44,585. A bullish candlestick pattern with a long upper shadow and a minor lower shadow was formed on the daily timeframe. Key support was found at 44,200, while the 20-day moving average (20DMA) at 45,000 continued to act as strong resistance. The index appeared to be consolidating within the range defined by 44,200 on the downside and 45,000 on the upside. A decisive break in either direction is expected to trigger fresh trending moves.

For the Nifty Bank, the pivot points are as follows:

• Support levels: 44,405, 44,308, and 44,151.

• Resistance levels: 44,718, 44,815, and 44,972.

In terms of options data, the maximum Call open interest (OI) was observed at the 19,800 strike with 86.67 lakh contracts, potentially acting as a key resistance level. It was followed by the 19,700 strike with 67.25 lakh contracts, and the 20,200 strike with 61.36 lakh contracts. Call writing was significant at the 19,800 strike.

On the Put side, the maximum open interest was at the 19,600 strike with 71.38 lakh contracts, potentially providing support. It was followed by the 19,500 strike with 64.70 lakh contracts and the 19,000 strike with 45.38 lakh contracts. Put writing was notable at the 19,600 strike.

In summary, the market showed signs of a potential rebound on September 29, with the Nifty forming a bullish harami pattern and finding support at the 50-day EMA. Key levels to watch are 19,500 on the downside and 19,800 on the upside. The Nifty Bank also recovered but faces resistance at the 20DMA of 45,000. Options data suggests important levels to monitor for potential price movements.