Record High Without Follow-Through: Nifty Trades in Narrow Range Near 26,300

The Nifty Index touched a fresh all-time high of 26,325.80, yet the rally lacked conviction as mild profit-booking emerged at higher levels. Despite the muted follow-through, the index continues to trade within a tight consolidation band, signalling a time-based correction rather than a trend reversal. The broader structure of higher highs and higher lows remains intact, underscoring the resilience of the ongoing uptrend.

On Monday, the index closed 27.20 points lower at 26,175.75, staying comfortably within last week’s trading range. The steady consolidation near record levels indicates sustained strength, and a decisive buying push could trigger fresh short-covering, driving Nifty further into uncharted territory.

Technical Overview: Healthy Retracement in an Uptrend

From a technical standpoint, the index is undergoing a healthy retracement after its recent one-way rally. The zone near 26,350, which aligns with the latest lifetime high, remains the immediate supply area.

A breakout above 26,350 could:

• Rekindle bullish momentum
  
  
• Trigger aggressive short-covering
  
  
• Open the gate toward 26,500 in the near term.
  
  

On the downside, the Nifty continues to find support near its 10-DEMA around 26,000, a strong accumulation zone. As long as the index holds above this level, the broader sentiment stays positive. Momentum indicators, especially the 14-day RSI above 60, further confirm persistent bullish undertones.

Key Levels to Watch:

• Resistance: 26,350 (crucial breakout level)
  
  
• Support: 26,000 (reliable buy-on-dips zone)
  
  

Derivatives Snapshot: Call Writers Take Control

The derivatives landscape reflects a cautious market mood. Call writers have aggressively added positions at near and at-the-money strikes, indicating expectations of limited upside in the immediate term. Meanwhile, put writers have partially unwound or shifted positions to lower strikes, hinting at expectations of range-bound or slightly bearish price action.

Key OI Highlights:

• 26,300 strike: ~2.39 crore call contracts added  a strong resistance wall
  
  
• 26,000 strike: ~1.69 crore put contracts  firm support base
  
  
• PCR fell sharply from 1.12 to 0.74, reflecting rising caution and increased call writing pressure
  
  

Market Outlook: Breakout Above 26,350 Needed for Next Leg Up

Despite printing fresh highs, Nifty has struggled to sustain above those levels due to immediate supply pressure. The index is likely to regain strong upward momentum only after clearing the 26,350 barrier.

Until then, the index may continue trading in a sideways-to-cautiously-negative zone, driven by heavy call writing around key resistance levels.

What to Expect Ahead:

• A breakout above 26,350 may unlock upside potential toward 26,500
  
  
• Support at 26,000 should keep bulls active on dips.
  
  
• Broader structure remains constructive with no signs of trend reversal
  
  
• Range-bound trading is likely until a clear directional breakout unfolds.