Nifty ends firm above 25,000; structure favors buy-on-dips strategy

The Nifty Index reclaimed the psychological 25,000 mark, driven by robust buying from lower levels. The benchmark also closed above the highs of the past two sessions, signaling strong bullish momentum. With follow-through buying on healthy volumes and broadly positive market breadth, the index ended the day higher by 69.90 points at 25,050.55, underscoring underlying strength.

Technical Overview

• Nifty is consolidating at higher levels, with support zones shifting upward toward 24,900–24,800. This band, aligned with the previous swing low, now emerges as a crucial demand zone.
  
  
• Sustaining above 24,800 keeps the buy-on-dips narrative intact. However, a decisive close below 24,770 would raise the risk of a bullish “fakeout” pattern.
  
  
• On the upside, a move beyond 25,100 could unleash further momentum towards 25,250, potentially sparking call unwinding and sharper upside traction.
  
  
• Indicators:
  
  
  • RSI → holding firmly above 50, reinforcing bullish strength.
    
    
  • Price action → consolidating at higher levels with improving breadth, tilting the setup toward further gains.
    
    

Derivatives Snapshot

The derivatives setup supports the technical picture:

• Put writers are aggressively adding positions at key strikes, reflecting firm conviction.
  
  
• 25,500 strike → heavy call OI build-up at 1.27 Crore contracts, making it a critical resistance zone.
  
  
• 25,000 strike → highest put OI at 1.94 Crore contracts, cementing it as a solid support base.
  
  
• PCR (Put-Call Ratio) improved from 1.11 to 1.34, underscoring the dominance of put writers and strengthening bullish sentiment.
  
  

Volatility Check

The India VIX slipped marginally by 0.04% to 11.78, reflecting subdued volatility. Despite global uncertainties, low VIX levels suggest that the market anticipates consolidation with a bullish bias, rather than sharp corrections.

Market Outlook

Nifty's resilience continues to be fueled by strength in IT stocks and firm positioning by put writers at near-the-money strikes.

• A sustained move above 25,100–25,200 may trigger the next leg of rally toward 25,250–25,400, aided by call unwinding.
  
  
• On the downside, 24,900–24,800 remains the primary demand zone, with dips expected to attract accumulation.
  
  
• A breach below 24,770 would be the first warning sign for bulls.
  
  

For now, the market structure favors a "buy-on-dips" strategy, with traders advised to closely track the 25,100 breakout level for confirmation of the next upside momentum.