Topline view
The market looks set for a gap-up / constructive open after the Diwali break. Overseas optimism around trade progress and a firmer rupee are the main positives this morning. That said, upside may be tested into heavy options strikes — trade light until the first-hour flows give conviction.
Opening cue (GIFT Nifty)
GIFT Nifty is signalling a strong premium to the previous close — the pre-open suggests a significant gap up into the session (expect the cash Nifty to open noticeably higher).
Nifty — practical support & resistance
- Immediate support: 25,800 – 25,700 (first defence on any pullback)
- Primary support / swing floor: 25,500 – 25,400
- Immediate resistance: 26,000 – 26,150 (near-term supply)
- Stretch resistance / target if momentum continues: 26,400 – 26,600
View: The likely early trading band is 25,700 – 26,150. If the market sustains the gap and clears 26,150 with volume, the 26.4–26.6k zone becomes the next objective. A failure to hold 25.7k would bring 25.4–25.5k into focus.
Institutional flows — FII / DII (most recent session)
- FIIs: Have returned to buying mode in recent sessions after a stretch of selling — the most recent full session showed a modest net inflow (offshore participants bought in aggregate).
- DIIs: Continued to be steady buyers, absorbing a lot of the day-to-day volatility and providing a cushion to the market.
Takeaway: The combination of renewed FII interest plus steady DII support is the key reason for the gap up — but flows will need to continue for a sustained leg higher.
FII index futures — longs & shorts (positioning snapshot)
- Net futures positioning: FIIs have added net long exposure in recent sessions — think thousands of contracts of net long added cumulatively — while also managing hedge exposure.
- Practical read: That leaves the market in a position where continued short-covering can fuel quick rallies, but fresh short builds into rallies would cap moves. Watch the first-hour futures delta closely.
October options (month) — OI battleground (what matters)
- Largest Call concentration (resistance reference): around 26,000 – 26,500 (major overhead supply)
- Largest Put concentration (support reference): around 25,000 – 25,500 (key defensive band)
Implication: The operational corridor this month sits roughly 25,000 – 26,500. Expect support to show up in the 25.0–25.5k band and call supply to slow rallies into the mid-26k area unless there’s heavy short covering.
USD/INR — currency move this morning
- Rupee: trading firmer after the holiday break — roughly ~₹87.8 – 87.9 / USD in early reads.
- Market impact: A firmer rupee is supportive for domestic risk sentiment and helps exporters’ outlook moderately; a reversal back toward the high-88s would sap risk appetite and hurt export names.
News & sector cues this morning
- Macro drivers: Optimism on trade discussions (U.S.–India) and modest foreign inflows.
- Sectors to watch: Banks and large caps should lead any constructive move; IT/exporters will be sensitive to currency headlines and trade details; cyclicals may catch up if flows broaden.
- Positioning note: Options wall around the mid-26k area could act as profit-taking zone for short-term traders.
U.S. / global events to watch (tonight)
- Keep an eye on U.S. market reaction to any late-day headlines and the U.S. economic calendar overnight (watch for scheduled prints and any Fed-speaker commentary). Moves in U.S. yields or the dollar will feed back into USD/INR and Asia-Pacific flows.
Trading playbook — concise rules for the desk
- Early band: 25,700 – 26,150.
- Bullish scenario: Hold above 26,150 with rising futures flow → target 26,400 / 26,600.
- Bearish scenario: Fail to hold 25,700 → target 25,500 / 25,400.
- Tactical notes:
- Use the first 30–60 minutes to watch real-time FII futures delta and option-chain activity.
- Buy shallow dips toward 25.7k with tight stops; trim into rallies close to 26.0–26.2k unless you see clear follow-through from offshore flows.
- Watch USD/INR: continued rupee strength supports higher risk tolerance; a rapid reversal weakens the rally thesis.