Nifty Takes a Breather After Rally, But Bullish Momentum Holds Strong

The Nifty index saw a minor dip on Monday, snapping a six-day winning streak as traders chose to book profits after a robust rally. Nifty declined by 120.75 points, ending the session at 25,517.05. Despite this brief pullback, the broader setup for Nifty remains positive, with the index still comfortably trading above key support levels and its short-term moving averages.

While Nifty faced resistance near the 25,640–25,740 zone, this move is widely seen as a healthy time-wise correction, rather than a signal of weakness. The recent decline has allowed the index to cool off slightly, setting the stage for a potential fresh leg higher.

Nifty Technical View: Short Pause, Strong Trend

• Support Zone for Nifty: The range between 25,300 and 25,400 now serves as a strong demand area for Nifty. This zone aligns with the previous breakout point and is expected to offer reliable support on any dips.
  
  
• Resistance for Nifty: The unfilled gap near 25,640–25,740 has emerged as a short-term resistance, capping upside in the current session.
  
  
• Moving Average Support: Nifty continues to hold above the 10-day and 20-day EMAs, which are both sloping upward, highlighting the index's underlying strength.
  
  
• Momentum Indicators: The Relative Strength Index (RSI) for Nifty remains above 60, signaling sustained momentum and confirming the bullish trend.
  
  

As long as Nifty holds above 25,300, the structure favors a ‘buy-on-dips’ approach. A close above 25,750 could revive bullish momentum, potentially propelling Nifty toward the 26,000 psychological mark.

Derivatives Snapshot: Nifty Traders Eye 26,000

• The 26,000 strike on the call side continues to attract heavy open interest, now at 1.27 crore contracts, acting as a key resistance for Nifty.
  
  
• On the put side, 25,000 remains a strong base with over 80 lakh contracts, indicating strong support for Nifty near this level.
  
  
• The Put-Call Ratio (PCR) has dropped sharply from 1.18 to 0.64, reflecting increased call writing at higher levels and suggesting caution among traders.
  
  
• The Max Pain point for Nifty has shifted to 25,500, reinforcing this level as a likely expiry pivot.
  
  

Despite the pressure, Nifty’s positioning in the options market suggests that traders expect gradual upside, even as they hedge against immediate resistance.

Volatility Watch: Calmness Persists for Nifty

India VIX, a key volatility gauge, rose slightly by 3.21% to 12.78, but it still remains below the crucial 15 mark. This suggests a stable market environment and low fear levels—supportive conditions for Nifty’s ongoing uptrend.

Market Outlook: Nifty’s Trend Remains Upward

The short-term profit booking in Nifty appears to be a constructive pullback rather than a bearish reversal. With Nifty continuing to hold above critical support levels and trading well above its short-term EMAs, the overall structure stays bullish.

Even though Nifty may consolidate in the 25,400–25,740 range, the bias remains upward. Traders and investors should monitor price action closely around the 25,300 support and the 25,750 resistance. A breakout above this upper band could trigger a move toward 26,000.

Final Take: Stay Bullish on Nifty, Buy the Dips

In conclusion, Nifty’s price action shows that bulls are still in control. The dip offers a buying opportunity rather than a cause for concern. With strong technical backing, stable volatility, and resilient support, the broader sentiment around Nifty remains constructive.