Trade Setup for September 26: Key Insights Before the Market Opens
The Indian stock market faced a decline on September 25 as the Nifty 50 reversed over half its recent rally, slipping 166 points and marking its fifth consecutive day of weakness. This has set a cautious tone for September 26's trade session with experts identifying critical technical levels and market sentiments to watch.
Nifty 50 Outlook
The Nifty 50 index closed near 24,891, below the crucial support level of 24,900, signaling potential further downside. Technical indicators highlight a bearish trend:
The index formed a long bearish candle with weak momentum.
It stayed below the 20-day and 50-day EMAs and slipped below the Bollinger Bands midline.
RSI dropped below 50, settling at 46.20 with a bearish crossover.
MACD showed a negative crossover with weakening momentum.
Bank Nifty Insights
The Bank Nifty also indicated selling pressure:
Closed at 54,976 with a long upper shadow bearish candle.
Stuck in a lower high–lower low structure and below key EMAs.
Tested the 100-day EMA intraday and retraced 38.2% of its recent rally.
RSI at 48.78 showed a negative crossover, while MACD momentum faded.
Resistance is noted around 55,195 to 55,425, with support levels near 54,909 to 54,679 .
Options Market Highlights
For Nifty, the 25,000 strike has maximum Call open interest at 1.67 crore contracts, making it a strong resistance level.
Call writing was significant at 25,000, 25,100, and 25,050 strikes.
Put open interest peaked at 25,000 strike (93.08 lakh contracts), providing support.
Put writing activity was highest at 24,900 strike, indicating important support zones.
For Bank Nifty:
Maximum Call open interest is at 56,000 strike with 18.21 lakh contracts.
Put open interest centers on 54,000 strike with 15.61 lakh contracts, acting as support.
The Nifty Put-Call ratio (PCR) dropped to 0.68—the lowest since August 8—indicating a generally bearish sentiment as traders sold more Calls than Puts .
Market Sentiment and Stocks Activity
The India VIX (fear index) rose 2.47% to 10.78, signaling increased volatility and discomfort among bulls.
18 stocks showed long build-up, indicating accumulation.
82 stocks underwent long unwinding—a decline in open interest with falling prices.
87 stocks saw short build-up with increased open interest and falling prices.
26 stocks experienced short-covering, meaning falling open interest with rising prices.
Regarding F&O bans:
No new stocks were added to the ban list.
RBL Bank and Sammaan Capital remain banned.
HFCL was removed from the ban list.
Conclusion
Traders should exercise caution on September 26 as technical indicators and options data suggest a continuation of bearish momentum for the Nifty and Bank Nifty. Key levels to watch for potential rebounds or breakdowns will dictate trading opportunities amid rising market volatility.