Nifty Breaks Losing Streak, but Range-Bound Trade and Lower-High Structure Persist

The Nifty index finally broke its four-session losing streak and reclaimed levels above its 20-day exponential moving average (DEMA). Despite this short-term relief, the benchmark continues to struggle on a broader scale, failing to deliver a positive weekly close for three consecutive weeks. The index remains trapped within a tight trading band, unable to escape its prevailing lower-high structure.

Narrow Range Persists Despite Double-Bottom Support

On the downside, the Nifty has established a notable demand zone, supported by a double bottom that reinforces key support levels. However, upside attempts remain shallow, with the index trading below its recent swing high of 26,065, clearly marking the boundaries of the ongoing consolidation.

On Friday, the index gained 150.85 pointsto close at 25,966.40, yet the broader trend remains cautious and is capped by persistent selling pressure.

Lower-High Structure Limits Upside Momentum

Each intraday recovery has been met with fresh selling, suggesting that market participants are using rallies to initiate short positions. Unless the index delivers a decisive breakout above 26,100–26,200, any upward move is likely to be viewed with skepticism and could turn into a bull trap.

From a technical standpoint, the Nifty remains firmly within a consolidation phase, constrained between:

• Resistance: 26,220
• Support: 25,700

The persistent lower-high pattern keeps 26,200 as the crucial zone for any meaningful trend reversal.

Momentum indicators echo this caution. The Relative Strength Index (RSI) remains below the neutral 50 level, signaling a lack of directional conviction and suggesting a period of time-wise consolidation rather than a steep correction.

Derivatives Snapshot: Caution Dominates the F&O Space

The derivatives market reflects a growing undertone of caution:

Call Writers Reinforce Overhead Resistance

Fresh call writing at at-the-money (ATM) and nearby strikes highlights strong resistance at higher levels. Nearly 1.41 crore call contracts at the 26,000 strike solidify this zone as a robust supply area.

Put Writers Turn Defensive

Put writers have trimmed exposure and shifted positions to lower strikes, indicating expectations of prolonged range-bound movement rather than an immediate breakout.

A significant build-up of 1.36 crore put contracts at the 25,900 strike offers notable support on the downside.

PCR Indicates Mild Improvement in Sentiment

The Put-Call Ratio (PCR) has risen to 1.10 from 0.66, suggesting a slight improvement in bullish sentiment as buyers remain active in defending lower zones.

Market Outlook: Range-Bound Bias Likely to Continue

While the Nifty staged a mild recovery toward the end of the week, the near-term structure remains fragile. The dominant lower-high pattern highlights strong bearish presence in the 26,100–26,200 resistance corridor.

Critical Levels to Watch

• Immediate Resistance: 26,100–26,200
• Major Support: 25,800–25,700
• Intermediate Support: 25,900

The concentration of both call and put writing around ATM strikes reflects a tightly bound market with limited directional cues.

Possible Scenarios

Bullish Scenario

A decisive close above 26,100 may trigger renewed bullish momentum, opening the path toward 26,350.

Bearish Scenario

A breakdown below 25,900 could weaken the structure and push the index toward 25,700, extending the consolidation phase.