The Indian benchmark index, the Nifty 50, extended its losing streak on October 31, 2025, closing the session significantly lower. The continued fall reflects a pervasive bearish sentiment in the market, driven by global cautiousness and a key price action reversal during the trading day.
Why the Market Fell Today
The Nifty’s decline was primarily triggered by a decisive shift in intraday momentum and persistent global uncertainty.
- Rejection at Key Price Levels (Intraday Reversal):
- The day began with a slight gap down, and initial buying managed to absorb the selling pressure, pushing the market higher with a positive delta.
- However, this rally was abruptly halted at 9:40 AM when a strong block of selling orders—described as “good absorption”—came in from the previous day’s single print zone.
- This rejection trapped the early buyers, leading to a fast and sharp sell-off that formed a bearish Fair Value Gap (FVG). This technical reversal signaled that strong supply was waiting at higher levels, extinguishing the initial positive momentum and setting the bearish tone for the rest of the day.
- Global Cautiousness and Foreign Outflows:
- The broader market was weighed down by a cautious global sentiment and continued Foreign Institutional Investor (FII) selling, which has been a recurring drag near all-time high valuations.
- News regarding India’s crude oil imports from Russia, despite attempts to buy from non-sanctioned entities, introduced a layer of geopolitical uncertainty, as major Indian refiners have paused buying due to US sanctions on key Russian producers.
- The market is still awaiting a conclusive, positive outcome from a potential US-India trade deal, which, if finalized, could provide the strong positive news needed for a sustained recovery.
Market Summary
The Nifty opened with a slight Gap Down by 14.05 points at 25836.80. It saw an intraday high of 25953.75 and a low of 25711.20, finally closing at an LTP of 25722.10. Overall, the market was down by 155.75 points (-0.60%). The India VIX rose by 0.66%, settling at 12.15.
My Trade Logic: Maintaining a Bearish Stance
My trading strategy is currently rooted in a bearish view on the short-term trend. I took short-term positional trades on the downside for the upcoming expiry cycles:
- 4th November Expiry: I established a short position that will be profitable if the market closes below the 26100 level. This view anticipates a continuation of the selling pressure.
- 11th November Expiry: I also created a bearish position around the 26000 level.
My overall perspective remains bearish, requiring me to hold these positions and manage them with adjustments if the market unexpectedly reverses. As a result, I did not book any profits or losses today, meaning no realized P&L was generated.
Technical and Open Interest Insights
- Intraday Technicals: The day’s Point of Control (POC) was established at 25780, with a negative Rotation Factor of -8 and a POC count of 10.
- Support and Resistance: The immediate strong Support is seen at 25500, while Resistance remains at 25900.
- Open Interest (4th Nov Expiry):
- Call Open Interest (COI) is highest at 26000, confirming this as a major hurdle for the bulls.
- Put Open Interest (POI) is highest at 25500, acting as the primary support zone.
- There was a massive 798% change in Call OI at 25750, suggesting aggressive shorting took place.
- The Put OI at 24550 saw a 102% change.
Sectoral and Global Updates
- Sectoral Movement: The PSU Bank sector was the top gainer, while the Consumer sector was the primary loser. In Nifty constituents, BEL was the top gainer and Eternal was the top loser.
- Global News: News confirmed that Indian Oil continues to procure Russian crude from non-sanctioned entities. Meanwhile, a Russia-backed sanctioned Indian refiner boosted crude runs to 90%, and India stated companies have licences to import rare earth magnets from China, highlighting the complex global trade backdrop.
Bonus Point for Traders: Avoid the Gambler’s Fallacy
It is crucial for traders to remember the Gambler’s Fallacy: the erroneous belief that because the market has fallen for several consecutive days, it is “due” for a bounce-back tomorrow. Every day presents a fresh set of conditions, order flow dynamics, and news events. Treat each trading session as a completely independent event; anything can happen.
Disclaimer: This blog is for educational purposes only and is based on personal observations and technical analysis. I am not a SEBI registered advisor. Trading in the securities market is inherently risky. Consult your financial advisor before making any investment or trading decisions. The P&L mentioned is only to demonstrate options strategy effectiveness and is not a promotion or guarantee of profits.
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