Nifty Shows Resilience Amid Volatility; Range-Bound Setup Dominates

Market Recap

Nifty faced intense pressure following heavy selling in the IT pack, triggering a sharp gap-down opening. Despite the weak start, the index avoided further deterioration and spent the remainder of the session consolidating within a narrow intraday range.

Although the decline caused near-term discomfort, the broader structure remains intact as the index continues to defend its critical support zone. Importantly, Nifty held above its prior gap boundaries, which have now transitioned into immediate support levels. The consistent absorption of supply at lower levels reflects underlying buying interest.

However, muted upside momentum indicates that the market is transitioning into a range-bound phase rather than building a directional trend.

A sturdy base is gradually developing in the 25,700–25,650 zone, which aligns with key technical confluences and reinforces this band as a vital defensive region for bulls. At the same time, repeated rejection near the psychologically important 26,000 mark signals hesitation at higher levels. Unless the index delivers a sustained breakout above this threshold, consolidation is likely to persist.

Thursday’s session reinforced the sideways-to-bearish undertone. After opening sharply lower, the index managed to protect immediate supports, signalling that buyers remain active on declines. Nifty eventually settled 146.65 points lower at 25,807.20, maintaining the broader range-bound outlook.

Technical View

Structurally, the index continues to oscillate within a broad trading range, with both bulls and bears defending their respective territories.

The formation of a small-bodied candlestick reflects limited directional conviction. The broader setup currently favours a “sell on rise” approach, unless a decisive breakout above 26,000 materialises. Such a move would be required to confirm renewed bullish momentum and trigger fresh upside acceleration.

The 25,600–25,700 region has evolved into a critical demand cluster. This zone coincides with:

• The 0.382 Fibonacci retracement level
• Key short-term moving averages

This confluence makes it a significant inflection point for the index.

Momentum indicators reinforce the neutral stance:

• RSI hovering in the 40–60 range, signalling lack of strong directional bias
• No signs of momentum expansion

A sustained move above 26,000 could invite aggressive buying interest. Conversely, dips toward 25,600–25,700 are likely to attract accumulation.

Derivatives Snapshot

Options data reflects a cautious near-term undertone.

• Call writers have aggressively built fresh positions at at-the-money and nearby strikes, limiting immediate upside potential.
• Put writers have repositioned at lower strikes, suggesting expectations of a defined trading band.

Key observations:

• 1.68 crore open interest at the 26,000 call strike, establishing it as a formidable resistance barrier
• 54.20 lakh contracts added at the 25,500 put strike, strengthening it as immediate support
• Put–Call Ratio (PCR) declined sharply to 0.61 from 0.89, highlighting relatively weaker sentiment and dominance of call writing

The derivatives structure supports a capped upside with defined downside support.

Market Outlook

Nifty remains confined within a broader consolidation range, facing repeated resistance near 26,000 while sustaining above short-term moving averages.

The formation of a stable base within 25,600–25,700 keeps the technical structure intact. A decisive and sustained breakout above 26,000 could open the door for a sharper short-covering rally.

On the downside, retracements toward the 25,600–25,700 support zone are expected to attract meaningful buying interest and encourage fresh accumulation.

Until directional clarity emerges via breakout or breakdown, a “sell on rise” strategy remains tactically favourable.

Traders are advised to remain selective, disciplined, and nimble while navigating the evolving consolidation phase.