Strong October Series: Bulls Take Full Control
The October derivatives series ended on a powerful note, with Nifty and Bank Nifty rallying 5.38% and 6.55%, respectively. The uptrend was driven primarily by aggressive short covering from Foreign Portfolio Investors (FPIs) and proprietary traders, setting the stage for a potentially bullish November.
Despite relatively lower rollovers, the market maintained its optimism — a clear sign that smart money is still accumulating. Meanwhile, India VIX stayed muted at 11.95, hiding a mild layer of nervousness beneath the surface.
FPIs’ net short positions fell sharply to 92,116 contracts, while cash inflows worth ₹10,040 crore hinted at a return of foreign investor confidence.
October Series Recap: Short Sellers on the Run
The month was marked by low volatility and headline-driven moves, where bears failed to sustain pressure. Each dip in Nifty and Bank Nifty was swiftly bought, creating a strong higher-high, higher-low structure.
- Nifty futures rollovers: 75.79%, down from September’s 82.60%.
- Rollover cost: 0.64% (₹164), showing selective long carryovers.
While rollover participation declined, the underlying data confirms a constructive undertone for the November series.
November Series Outlook: Sideways to Bullish Bias
The November series began with a contraction in open interest (OI) to 1.51 crore shares, suggesting that the October upmove was mostly short-covering-led.
Despite this, the sentiment remains bullish-to-sideways, with dips likely to attract buyers. Traders, however, are expected to stay cautious amid global uncertainties and event-driven volatility.
Volatility Watch: Calm Before the Storm?
The India VIX closed at 11.95, staying within the neutral 10–13 range for the fourth consecutive month. But it's 8% rise in the final week of October that signals mild nervousness, possibly a precursor to volatility spikes.
Global cues like rising bond yields, dollar strength, and trade tensions may add to the undercurrent. Hence, traders should remain alert and maintain disciplined risk management.
FPI Flows: Shorts Unwinding, Sentiment Improving
FPIs remained net bearish for the fifth consecutive series but covered a major chunk of their shorts during October.
- Net short positions: Down from 1,70,000 to 92,116 contracts.
- Cash market inflows: ₹10,040 crore first after three months of selling.
- Long-short ratio: Improved from 5.98% to 19.51%, signaling easing bearishness.
Though still cautious, FPIs’ reduced bearish positioning reflects growing market confidence.
Options Market: Key Levels to Watch
The options data paints a mildly optimistic picture.
- Resistance: 26,000 and 26,200 (heavy call writing)
- Support: 25,800 (strong put writing)
- Critical floor: 25,500 zone
The 25,500–26,000 range will be crucial for directional clarity:
- A breakout above 26,100 may trigger short covering and push Nifty to 26,500–26,700.
- Dips near 25,700–25,500 are likely to attract buying.
- A close below 25,450 would hint at short-term weakness.
Technical Outlook: Trend Remains Strong
Technically, Nifty remains in a robust uptrend after bottoming near 24,600. The index has maintained its higher-high, higher-low formation, staying well above the 10-, 20-, and 50-day EMAs.
Notably, no week in October closed negative, making it the strongest monthly gain in the past seven months. As long as 25,500–25,600 holds, the structure remains bullish.
Strategy Playbook: Buy Dips, Stay Tactical
As long as Nifty sustains above 25,500–25,600, traders can continue with a buy-on-dips approach.
- Bullish trigger: Close above 26,100, targets 26,500–26,800.
- Caution zone: Below 25,500, possible slide toward 25,000.
In the current setup, discipline and agility are key. Stay aligned with the prevailing upside momentum, but be ready to pivot if support levels break.
Key Takeaways
✅ Nifty +5.38%, Bank Nifty +6.55% in October series
✅ FPIs unwind shorts; ₹10,040 crore cash inflows
✅ VIX remains subdued at 11.95, signaling low volatility
✅ Strong support at 25,500; resistance at 26,100
✅ November outlook: Bullish-to-sideways with buy-on-dips strategy
Conclusion:
The October rally reinforced the bulls’ control over Indian equities. With FPIs returning, volatility low, and indices trading above key moving averages, the Nifty and Bank Nifty are well-positioned for a strong November series. As long as 25,500 holds, the path of least resistance remains upward.
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