Nifty Kicks Off October with a Strong Rebound; Key Test Lies at 25,000 Resistance

The Nifty 50 index opened October on a firm footing, snapping its eight-session losing streak with a powerful rebound. Backed by the RBI’s sweeping set of reforms, the benchmark surged higher as aggressive short-covering from institutional players fueled momentum. Nifty ended Wednesday up 225.20 points at 24,836.30, marking its best single-day performance in weeks.

Technical Overview: Bulls Eye the 25,000 Mark

The rally helped Nifty close above the highs of the previous two sessions for the first time in nine days—a clear sign of meaningful short-covering by FPIs in index futures.

• Support Zone: A strong base has emerged in the 24,600–24,700 range, reinforcing the case for a buy-on-dips strategy.
  
  
• Resistance Zone: The index now faces its most critical hurdle at 24,900–25,000, where a cluster of the 20-, 50-, and 100-day EMAs coincides with the 0.50 Fibonacci retracement level.
  
  
• Momentum Indicators: The RSI rebounded to 45, recovering from oversold territory and shifting towards neutrality, while the bullish candle reinforced improving sentiment.
  
  

Unless Nifty decisively clears the 25,000 ceiling, sellers are likely to defend their positions. However, a sustained breakout could unlock an upmove toward 25,200.

Derivatives Snapshot: Bias Turns Bullish

The derivatives setup reflects a clear shift in sentiment:

• Put Writing: Aggressive additions at the 24,700 strike (1.01 crore contracts) highlight strong support.
  
  
• Call Writing: A build-up of 99.94 lakh contracts at the 25,000 strike reinforces this as a stiff resistance zone.
  
  
• PCR: The Put-Call Ratio (PCR) surged to 1.23 from 0.72, confirming a bullish undertone as put writers dominated call writers.
  
  

The migration of call positions to higher strikes, alongside consistent put writing near current levels, signals that downside risks are capped.

Volatility Check: India VIX Slips

The India VIX cooled by 7.03% to 10.28, reflecting calmer volatility after recent swings. However, the rebound from historically low levels suggests traders are still deploying protective hedges, keeping risk management strategies active.

Market Outlook: Sideways-to-Bullish Bias Ahead

The October kickoff has brought optimism back into the markets, aided by RBI reforms, aggressive short-covering, and strong support at lower levels.

• Holding above 24,600–24,700 is crucial for sustaining the bullish momentum.
  
  
• A breakout above 24,900–25,000 will act as the ultimate trigger for further gains toward 25,200.
  
  
• Until then, markets may consolidate within a sideways-to-bullish trading band.
  
  

Overall, the market tone has shifted from cautious to constructive, with buyers regaining control as October begins.