Nifty 50 gained 0.7% to close at 22,753, snapping a four-day decline, as volatility rises. With the India VIX touching 17.16 and the monthly derivatives expiry approaching tomorrow, investors remain cautious about whether the index can sustain this recovery.
The Nifty 50 snapped a four-day losing streak on Monday, closing at 22,753 after a volatile trading session. The index recovered from an intraday low of 22,387 to erase its early losses. Despite this 0.7 percent gain, the broader technical trend remains challenging, as the index continues to trade below its 20-day, 50-day, 100-day, and 200-day moving averages. Investors are looking for a decisive move above 22,850 to confirm that the recent downward pressure has eased, with 23,200 acting as a key resistance level.
The volatility gauge, India VIX, climbed 1.78 percent to 17.16, marking its highest closing level since late May. A rising VIX typically signals that investors are preparing for sharper price swings, especially with the monthly derivatives expiry scheduled for October 27. This caution is reflected in options data, where the 23,000 strike price has the highest concentration of open interest for call options, effectively acting as a near-term ceiling for the market. Conversely, the 22,500 level is currently serving as a primary support floor.
The Bank Nifty showed a similar defensive stance, closing at 54,367 with a modest gain of 0.15 percent. After briefly dipping below its September lows earlier in the day, the index formed a chart pattern often interpreted as a sign of buying interest at lower levels. Strategists are focusing on the 53,700 to 53,800 range as a critical pivot zone for the banking sector. Maintaining this level is considered essential to prevent further selling pressure. If the market sentiment shifts positively, the index may attempt a pullback toward 55,000, though the downward slope of key moving averages remains a hurdle for a sustained recovery.
Investors will be tracking the expiry proceedings tomorrow to gauge whether the current support levels hold or if the heightened volatility leads to further consolidation. The primary monitorable will be the market's ability to maintain gains above current support levels amidst the caution surrounding the derivatives expiry.