The Nifty index extended its corrective phase for the third consecutive session on Wednesday, reflecting a steady loss of momentum amid persistent selling pressure at higher levels. The benchmark continues to hover near a cluster of critical support zones even as overhead resistance caps every minor bounce, signalling a time-wise consolidation rather than a sharp price-driven correction. While short-lived recovery attempts are repeatedly absorbed by supply, buyers remain active at lower levels, keeping the broader trend biased toward a bearish-to-range-bound setup.
Nifty slipped 46.20 points to close at 25,986.00, breaking below the psychological 26,000 mark, which now flips into a key resistance zone. The index is currently near its 20-DEMA, a technical level that has historically acted as a strong reversal trigger during previous pullbacks.
Technical Outlook: Index Forms Doji Near Key Inflection Zone
From a technical standpoint, Nifty has formed a Doji candlestick, reflecting indecision as the index tests a critical confluence of support levels. A decisive break above 26,150, the immediate supply pocket formed by the lows of the last three trading sessions, remains crucial to revive upside momentum and pave the way toward 26,350.
On the downside, the 20-DEMA and the 0.382 Fibonacci retracement zone at 25,950–25,900 form the most important support cluster. Sustaining above this area is vital, as a breach could shift the short-term structure into a deeper corrective phase. This pocket now serves as the ultimate make-or-break support for the index.
Upside resistance remains anchored at 26,150, and with volatility steadily compressing, Nifty will require a breakout on either side to establish a decisive trend. The 14-day RSI, slipping toward 53, indicates cooling momentum and a drift toward neutral territory. Until directional clarity emerges, the index is likely to remain range-bound with a mild negative bias.
Derivatives Snapshot: Call Writers Tighten Grip Near Resistance
The derivatives landscape continues to highlight a cautious market environment. Call writers have added heavy positions at near and at-the-money strikes, signalling expectations of restrained upside. Meanwhile, put writers have reduced exposure and shifted to lower strikes, reflecting uncertainty and a slightly bearish undertone.
A massive accumulation of 95.96 lakh call contracts at the 26,000 strike reinforces this level as a powerful resistance ceiling. On the other hand, strong put OI of 89.34 lakh contracts at the 25,500 strike underscores this region as a major support base.
The Put-Call Ratio (PCR) has softened to 0.68 from 0.72, pointing to rising caution and growing dominance of call writers around upper resistance zones.
Market Outlook: Range-Bound Setup Until Breakout Above 26,150
Nifty has now posted three consecutive lower-low closes, reflecting a gradual loss of momentum as sellers dominate intraday recoveries. The index remains trapped within a broad consolidation phase, and meaningful strength is likely only after a clear breakout above 26,150, which could trigger fresh short-covering and provide directional clarity.
With the index currently positioned near key supports, including the 20-DEMA and the Fibonacci 0.382 retracement zone, bulls must defend this area to avoid a deeper slide. Strong call writing at near-ATM strikes and stable put interest at 25,900 highlights a sideways-to-cautiously-bearish sentiment among market participants.
A sustained move above 26,150 would be the first confirmation of an upside extension toward 26,350. Conversely, as long as Nifty holds above 25,900, tactical control is expected to remain with the bulls, keeping the index confined to a well-defined range.
Until a decisive breakout emerges, adopting a range-bound trading strategy remains the most prudent approach for short-term traders.
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