The Nifty index continues to struggle for direction, remaining trapped in a narrow trading range amid persistent selling pressure at higher levels. Despite occasional bouts of short covering, the benchmark has failed to generate sustained buying momentum, keeping the near-term outlook cautious. Market participants remain watchful as the index hovers between crucial technical levels, with a decisive breakout expected to dictate the next meaningful move.
Market Recap: Volatility Without Direction
Throughout the week, Nifty largely drifted sideways, reflecting a lack of conviction from both bulls and bears. While the index managed to defend its immediate support zone, selling pressure dominated most sessions, limiting any meaningful upside follow-through. Intermittent intraday rebounds emerged but quickly faded, highlighting the fragile nature of recoveries in the current environment.
The index is currently sandwiched between its 20-day exponential moving average (EMA), which is acting as immediate resistance, and the 100-day EMA, which continues to provide support near the 25,600 level. This compression between key moving averages underscores the absence of a clear directional bias and reinforces the importance of a decisive breakout.
Friday’s trade remained volatile, with bears controlling the undertone despite a brief intraday bounce. Nifty ended the session marginally higher by 28.75 points at 25,694.35, but the muted close further confirmed the choppy and indecisive nature of the ongoing consolidation phase.
Technical View: Sell-on-Rise Behaviour Persists
From a technical standpoint, the index continues to face persistent selling pressure near resistance zones. Repeated failures to reclaim and sustain above the 25,900–26,000 region point to a clear sell-on-rallies market structure. The formation of lower highs on the daily charts further reinforces the bearish undertone in the short term.
Nifty remains confined within a broad 25,500–26,000 range. A decisive breakout on either side of this band is likely to define the next directional move. At present, the index is trading below its short-term moving averages, with the 20-day EMA acting as a strong overhead hurdle.
The 25,900–26,000 zone, which earlier served as a key demand area, has now transformed into a significant supply zone. On the downside, 25,500, along with the 25,600 level aligned with the 100-day EMA, continues to act as a crucial support pocket. Momentum indicators also reflect caution, with the Relative Strength Index (RSI) hovering near the 40 mark, indicating sideways-to-bearish momentum. A decisive breakdown below 25,500 could accelerate selling pressure, while a sustainable recovery would require the index to reclaim and hold above 26,000–26,100.
Derivatives Snapshot: Call Writers Cap the Upside
The derivatives setup mirrors the sideways-to-bearish tone seen in the cash market. Call writers have aggressively added fresh positions at at-the-money and nearby strikes, effectively capping the near-term upside. Put writers, on the other hand, have concentrated positions at lower strikes, signalling expectations of range-bound trade with limited immediate downside.
A significant open interest build-up of nearly 1.57 crore contracts at the 26,000 call strike highlights this level as a formidable resistance zone. Additionally, the addition of around 79.50 lakh call contracts at the 25,500 strike strengthens the overhead supply structure. The Put–Call Ratio (PCR) has edged up to 0.65 from 0.59, reflecting elevated caution and the continued dominance of call writing activity.
Market Outlook: Breakout Needed for Directional Clarity
Nifty continues to trade without a clear directional bias, with intraday recoveries consistently meeting selling pressure. Despite defending key support levels, the lack of sustained follow-through buying keeps the broader outlook guarded. The weekly chart’s doji formation further highlights market indecision.
The trading range is now well defined, with 26,000 acting as immediate resistance and 25,500 serving as strong support. A breakout from either end of this range is likely to set the tone for the next phase of market movement. The 25,500 level assumes added importance due to the convergence of technical and derivatives-based support; a failure to hold could open the door for a deeper correction toward 25,350.
On the upside, a meaningful revival in bullish sentiment is likely only if the index sustains above the 26,100 mark. Until such confirmation emerges, range-bound and sell-on-rallies strategies are expected to dominate in the near term.
Key Triggers to Watch
Looking ahead, market participants will closely monitor the earnings outcome of heavyweight Reliance Industries, which could influence sentiment in the coming sessions. Additionally, global cues—including political developments and statements from former US President Donald Trump—may add to volatility and shape near-term market direction.
For now, traders are advised to remain selective, disciplined, and cautious as the Nifty awaits a decisive breakout for directional clarity.
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