Nifty Indecisive Near 200-Day EMA; Index Stuck at a Make-or-Break Juncture

Market Recap

The Nifty 50 staged a modest rebound from oversold territory but continued to face strong selling pressure at higher levels, offering no clear confirmation of a trend reversal. While the index witnessed marginal short covering and managed to hold above its 200-day Exponential Moving Average (EMA), it once again failed to close convincingly above the previous session’s high—highlighting persistent supply and seller dominance near resistance zones.

Importantly, the benchmark has so far defended the key psychological 25,000 mark, suggesting the formation of a tentative base. However, the recent recovery appears to be driven more by oversold conditions across stocks rather than by fresh institutional buying interest. The lack of follow-through buying continues to limit the probability of a sustainable recovery.

At present, Nifty is hovering near its 200-day EMA and the 25,000 level, both of which have clearly emerged as a make-or-break zone for the near-term trend. Despite holding this support, upside momentum remains muted. Multiple previously broken support levels have now turned into strong overhead resistance, reflecting gradual deterioration in the broader market structure.

Unless the index decisively sustains above the 25,500 swing high, which also coincides with the 10-day EMA, selling pressure is likely to re-emerge on any rally.

Thursday’s session remained volatile, marked by a visible tussle between bulls and bears. Although Nifty attempted an intraday recovery after a gap-up opening, the move failed to sustain and selling pressure resurfaced at higher levels—indicating that confirmation of a durable recovery is still awaited. The index closed 132.40 points higher at 25,289.90, reinforcing expectations of a widening trading range and elevated volatility in the near term.

Technical View

From a technical perspective, Nifty has formed consecutive indecisive candlesticks near a critical inflection point, signalling uncertainty in market direction. While prices remain in oversold territory, repeated failures to reclaim immediate resistance levels clearly indicate selling pressure on rallies.

The ongoing lower-high formation, combined with consistent selling during intraday rebounds, confirms a sell-on-rise market structure, with bears retaining control. The broader trend remains fragile. Although intermittent short-covering rallies may continue, any upside move risks turning into a bull trap unless the index decisively reclaims the 25,500 resistance zone.

Nifty continues to trade below its short-term moving averages, all of which are sloping downward—reinforcing strengthening downside momentum. The 25,500–25,600 zone, which earlier acted as a strong demand area, has now transformed into a key supply zone.

On the downside, the 25,100–25,000 band, aligned with the 200-day EMA, is expected to act as immediate short-term support.

Momentum indicators remain cautious:

• RSI is hovering near 35, reflecting weak momentum, though close to oversold territory
• A decisive break below 25,000 could intensify selling pressure
• Any meaningful revival would require a sustained move above 25,500–25,600

Derivatives Snapshot

The derivatives setup mirrors the weakness visible on the charts. Call writers have aggressively added fresh positions at at-the-money and nearby strikes, effectively capping near-term upside. Meanwhile, put writers remain active at lower strikes, indicating expectations of a range-bound market rather than a directional trend.

• 25,500 Call Strike: Open interest build-up of ~1.18 crore contracts, marking it as strong resistance
• 25,000 Put Strike: Addition of ~1.03 crore contracts, reinforcing this level as crucial support
• Put–Call Ratio (PCR): Improved to 0.78 from 0.68, reflecting elevated caution and continued call writer dominance

Market Outlook

Nifty has recovered modestly over the past two sessions; however, buying conviction remains weak. The index continues to trade in a bearish phase, with every intraday rebound attracting fresh selling pressure. Despite oversold bounces, the lack of sustained participation keeps the overall outlook guarded.

Trading below key short- and medium-term moving averages, the index structure remains weak. This view is further reinforced by repeated doji formations near the 200-day EMA, underscoring the importance of the current make-or-break zone.

The near-term range is now well defined:

• Resistance: 25,500
• Support: 25,000

A decisive breakout on either side is likely to determine the next directional move. The 25,000 level carries added significance due to the convergence of technical and derivatives-based support. A breakdown below this zone could open the door for a deeper correction toward 24,700. On the upside, sentiment is likely to improve meaningfully only if Nifty sustains decisively above 25,500.

Until such confirmation emerges, sell-on-rise strategies are expected to dominate, with traders advised to remain selective, disciplined, and risk-aware.