Nifty Extends Decline; Index Near 26,000 as It Navigates a Crucial Reversal Zone

The Nifty index continued to face mild profit-taking as selling pressure emerged at higher levels, keeping underlying market strength subdued. The benchmark now trades at a pivotal make-or-break juncture, where price action remains confined to a narrow consolidation phase. Despite this sideways movement, the broader market structure of higher highs and higher lows remains intact, supporting the ongoing uptrend's resilience.

Nifty Slips Below Recent Lows, Tests Key Support Zone

On Tuesday, Nifty extended its decline by 143.55 points, closing at 26,032.20, falling below the lows of the previous three trading sessions.
This positions the index near a cluster of crucial support levels, where sustaining the higher-low structure becomes essential for the trend to regain strength.

The index is currently undergoing a healthy retracement, hovering around its 20-DEMA, a zone that has historically acted as a reliable reversal point.

Technical Outlook: 26,000 Emerges as a Make-or-Break Level

From a technical perspective, the index remains in a time-wise correction rather than a major price correction. Key levels to watch include:

Immediate Supply Zone

• 26,150 is a critical resistance aligned with the lows of the previous three sessions.
  A breakout above this zone could revive upward momentum.
  
  

Upside Targets

• 26,350 is the next major hurdle.
  A sustained move above this level may trigger short-covering and extend the uptrend.
  
  

Key Supports

• 26,000 aligns with the 20-DEMA and the rising trendline.
  This area forms a strong accumulation pocket.
  
  
• Sustaining above this zone keeps the bullish structure intact.
  
  

Momentum Indicators

• The 14-day RSI has cooled to around 55, reflecting a shift toward a more neutral setup and hinting at consolidation before the next directional move.
  
  

Derivatives Snapshot: Call Writers Tighten Their Grip

The derivatives setup reflects a cautious market mood:

Call Writing Dominates

• Significant call OI build-up of ~65.08 lakh contracts at 26,200, establishing it as a major resistance ceiling.
  
  

Put Writers Shift Lower

• Strong put OI of ~55.03 lakh contracts at 26,000, marking this as a vital support zone.
  
  
• Put writers have partly unwound higher positions and shifted lower, indicating expectations of extended consolidation.
  
  

PCR at 0.72

• A muted Put-Call Ratio signals rising caution as sellers dominate at higher levels.
  
  

Market Outlook: Sideways Bias Until a Breakout Emerges

Nifty remains locked within a broader sideways range, struggling to gain directional clarity near all-time high levels.
Momentum is likely to re-enter the market only after:

Bullish Trigger

• A decisive breakout above 26,350—which may spark short-covering and push the index higher.
  
  

Bearish Trigger

• A breakdown below 26,000, which currently looks unlikely given the strong support buildup.
  
  

As long as the index sustains above 26,000, dips are expected to attract buying interest.
A move above 26,150 would be the first signal of the uptrend resuming, while 26,000 remains the final make-or-break support.

Until a clear breakout is visible, a range-bound trading approach remains the most practical strategy for market participants.