Nifty Struggles for Direction as Bears Retain Control

The benchmark Nifty 50 extended its corrective phase for another session, ending 0.42% lower at 25,585.50, as selling pressure persisted across the board. The index continues to lack directional clarity, with bears firmly maintaining control near higher levels and buyers showing little conviction on declines.

Price Action Signals Continued Weakness

On the daily chart, Nifty formed a bearish candlestick, with the open and high placed almost at the same level, highlighting sustained selling pressure throughout the session and the absence of any meaningful intraday recovery. This price behavior clearly suggests that every pullback is being met with supply, reinforcing a “sell-on-rise” environment.

From a trend perspective, the index remains below the Supertrend indicator, underlining ongoing short-term weakness. Additionally, Nifty was rejected below the previous session’s low, signaling a lack of buying interest even at marginally lower levels.

The index has also slipped below the 23.6% Fibonacci retracement level at 25,685, a zone that was expected to offer interim support but has failed to hold—further adding to the negative undertone.

Below Key Moving Averages, Momentum Weakens

Nifty continues to trade below both the 20-day and 50-day moving averages, keeping the broader short-term structure under pressure and offering no immediate signs of trend reversal.

Momentum indicators reflect deteriorating strength:

• Daily RSI has slipped to the 37–38 zone, indicating weakening momentum and limited bullish participation
  
  
• MACD remains firmly in negative territory, with no signs of convergence or a bullish crossover
  
  

On the hourly chart, the structure remains decisively weak, marked by a clear sequence of lower highs and lower lows, confirming that the corrective trend is still intact. While minor pullbacks have emerged near the 25,500 zone, the absence of follow-through buying suggests these moves are largely driven by short covering rather than fresh long build-ups.

Derivatives Market: Options Data Reinforces Caution

The derivatives setup continues to validate the cautious-to-bearish bias seen in the cash market.

• The highest Call open interest is concentrated at the 25,800 strike, with Call writers holding a substantial 1.72 crore contracts, making this level a formidable resistance zone
  
  
• On the downside, the 25,500 strike has emerged as the key Put base, with Put writers holding around 1.66 crore contracts, indicating immediate support
  
  

However, the strength of this support could be tested if spot prices continue to trade below key retracement and moving average levels.

The Put–Call Ratio (PCR) stands at 0.73, remaining in negative territory and reflecting a bearish skew in options positioning.

Outlook: Range-Bound with Downside Risk

On the downside, the 25,500–25,470 zone remains the immediate support band. A decisive breakdown below this area could open the door for a deeper correction toward 25,350, followed by lower Fibonacci retracement levels. A breach of these levels could accelerate the ongoing corrective move.

On the upside, any recovery toward the 25,700–25,770 zone is expected to face stiff resistance due to the confluence of Fibonacci levels, moving averages, and heavy Call writing. Only a sustained move above 25,820 would begin to ease the current corrective pressure.

For a meaningful shift in sentiment, Nifty would need to reclaim and hold above the 25,900 level, which currently appears challenging given prevailing technical and derivatives signals.

Conclusion

Overall, the near-term outlook for Nifty remains restrained. Weak price structure, deteriorating momentum indicators, and bearish derivatives positioning collectively point toward continued caution. As long as the index remains below key resistance zones and the PCR stays in negative territory, rallies are likely to be sold into rather than chased, keeping the market vulnerable to further corrective moves.