Nifty Breaks Losing Streak but Lower-High Pattern Still Dominates: Will the Index Break Out of Its Range?

The Nifty index finally snapped its four-day losing streak and reclaimed levels above its 20-day exponential moving average (DEMA), offering temporary relief to market participants. However, despite this bounce, the broader market structure remains cautious. The index has failed to register a positive weekly close for the past three weeks and remains stuck inside a well-defined consolidation range.

Structurally, the Nifty continues to form a sequence of lower highs, signalling a lack of strong bullish conviction. The trading pattern remains range-bound, with neither buyers nor sellers showing dominance over the short term.

Nifty Technical Outlook: Range-Bound With a Lower-High Formation

On the downside, the index has established a strong demand zone, supported by a visible double-bottom formation that reinforces the support structure. Yet, the upside remains restricted, as the Nifty continues to trade below its recent swing high of 26,065, keeping the overall bias subdued.

On Friday, the index closed at 25,966.40, up 150.85 points. While the rebound was encouraging, market sentiment still appears fragile.

Key Observations:

• The index has consistently attracted buying at lower levels.
• Every intraday recovery meets selling pressure, especially near resistance areas.
• Traders are using pullbacks as opportunities to initiate fresh shorts.
• A breakout above 26,100–26,200 is required to shift momentum in favour of the bulls.

Unless Nifty crosses this resistance zone with substantial volumes, any bounce is likely to remain a pullback within a broader consolidation phase, and may even turn into a bull trap.

Broader Range Still Intact: 26,220 to 25,700

The Nifty remains positioned within a consolidation range between:

• Upside: 26,220
• Downside: 25,700

The persistence of the lower-high pattern makes the 26,200 mark a decisive threshold for any meaningful trend reversal.

Momentum Indicators

• RSI remains below the neutral 50 zone → signalling weak directional strength.
• MACD is not showing strong upside momentum → indicates time-wise consolidation rather than a sharp directional move.

Together, these indicators reinforce the expectation that the market may continue to trade sideways in the near term.

Derivatives Snapshot: Call Writers Dominate, Resistance Strengthens

The derivatives data suggests a cautious undertone in the market.

Key Highlights:

• Call writers have increased positions at at-the-money (ATM) and near strikes → strengthening resistance.
• Put writers have trimmed positions → reflecting expectations of prolonged consolidation.
• Heavy call OI build-up:
  • 26,000 strike: ~1.41 crore contracts → strong ceiling.
• Heavy put OI build-up:
  • 25,900 strike: ~1.36 crore contracts → solid support cushion.
• PCR rises to 1.10 (from 0.66) → indicating a slight improvement in sentiment but still within a cautious framework.

This positioning suggests a tightly bound market with strong participation from both buyers and sellers around current levels.

Market Outlook: Consolidation to Continue Unless Nifty Breaks 26,100

The index recovered modestly toward the end of the week, but the near-term outlook remains delicate. Sellers are still active in the 26,100–26,200 resistance zone, which continues to cap the upside.

Immediate Levels to Watch

Upside

• 26,100–26,200: Major resistance
• Above 26,100 → Potential rally toward 26,350

Downside

• 25,900: Immediate support
• 25,800–25,700: Critical demand zone
• Below 25,900 → Selling pressure may intensify

A decisive breakout above 26,100 could revive bullish momentum, while a breakdown below 25,900 may extend the current consolidation phase toward the 25,700 mark.

Conclusion

The Nifty has shown signs of recovery, but the broader trend still reflects caution. The persistent lower-high structure, rising call open interest, and subdued momentum indicators highlight a market stuck within a defined range.

For traders, the critical levels remain:

• Bullish only above 26,100–26,200
• Bearish weakness below 25,900

Until the index breaks out decisively, expect continued range-bound movement with a slightly cautious bias.