Nifty Holds Ground but Upside Capped: Awaiting Breakout Amid FOMC & Expiry Volatility

Nifty moved quietly on Wednesday but managed to close above the previous day's high, which is a positive sign for bulls. With the monthly expiry and the US Fed's FOMC meeting coming up, traders are staying cautious. These events could bring more volatility soon.

Key Technical Highlights:

• Support Still Intact:
• Nifty is holding above the important 24,500 to 24,550 support area, which matches the 100-day moving average. This level is acting as a short-term floor, and staying above it could mean the index is finding a bottom for now.
• Reversal Pattern Awaiting Confirmation:
• A bullish engulfing pattern has appeared, but it still needs confirmation. For this signal to hold, the recent low should stay intact in the next few sessions.
• Stiff Resistance Overhead:
• The index is up against tough resistance between 24,900 and 25,000, where several short-term moving averages come together. Unless Nifty breaks above this area, any upward move may run into selling.

On Wednesday, Nifty rose slightly by 33.95 points to close at 24,855.05. The index traded in a tight range, so a breakout in either direction could set the next trend.

Derivatives Snapshot:

• Call Writing Dominates at 25,000:
• Heavy call writing with 1.58 crore contracts makes this a strong ceiling for now.
• Put Writers Active at 24,800:
• The highest open interest on the put side is at the 24,800 strike with 1.12 crore contracts, offering near-term support.
• Put-Call Ratio (PCR):
• The put-call ratio improved a bit from 0.71 to 0.78, which hints at some bargain buying at lower levels, but the overall mood remains cautious.

Volatility Check:

• India VIX dropped 2.78% to 11.20, showing that there is no panic and the market is likely to stay in a range for now. If VIX stays below 13, a sudden sharp fall seems unlikely.

Market Outlook:

With the FOMC decision and monthly expiry coming up, the market is waiting to see what happens next. The technical picture is unclear, so a breakout will be needed to show the next direction.

• Support to Watch: 24,500–24,550
• Resistance to Clear: 24,900–25,000

A clear move above 25,000 could start a new rally, while dropping below 24,500 might bring back selling pressure. Until then, the market may keep moving sideways.

Strategy for Traders:

• Stay flexible and think about using option strategies such as straddles or strangles to make the most of the likely volatility.
• Wait before making large directional trades until the market shows a clear breakout or breakdown.
• Keep your stop-losses tight and stick to smaller positions, especially with major events like the FOMC ahead.