Muted Volatility Signals Consolidation as Nifty Resists Directional Trend

The Nifty index started the week cautiously and still hasn't found a clear direction. Even though Monday began strongly, the index stayed within a narrow range and formed a Doji candlestick on the daily chart, which usually signals indecision.

Nifty could not move back above the 25,000 mark, which remains a strong resistance level. It closed with a small gain of 97.65 points at 24,967.75, showing that sellers are still active near this level.

Currently, the index is near a key support area around 24,800, which aligns with the 20-day and 50-day EMAs and a gap support level. The overall trend looks sideways to weak, and any upward move will probably face strong selling. Unless Nifty moves above 25,150, sellers are expected to stay active at higher levels.

• Immediate resistance: 25,000–25,100
• Broader range: 24,800–25,150
• Bias: Sideways with weak undertone

A breakout beyond this range, however, could set the stage for the next directional move.

Derivatives Snapshot

The options market echoes the cautious sentiment:

• Heavy call writing at 25,000 (OI: 1.57 crore contracts) has reinforced this level as a formidable ceiling
• On the downside, the 24,900 put strike holds the second-highest OI of 96.82 lakh contracts, offering near-term support.
• Put-Call Ratio (PCR) has improved from 0.61 to 0.77, but call writers remain dominant, limiting the scope for a sharp breakout.

This positioning highlights restrained conviction among traders, with supply pressure outweighing demand at higher zones.

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Volatility Check

India VIX rose slightly by 0.26% to 11.75 but is still steady. Even with global uncertainties, low volatility points to consolidation rather than a correction, showing cautious optimism and no panic in the market.

Market Outlook

Nifty now clings to its crucial support at 24,800, with the broader range capped between 24,850 (swing low) and 25,150 (swing high). The pattern points to:

• Limited upside potential in the near term.
• Prolonged consolidation until a decisive breakout emerges.

Renewed call writing at higher strikes, coupled with sustained put additions, validates this sideways structure. Unless Nifty decisively clears 25,150, upside momentum will remain capped.

• Break above 25,100–25,150 → Could trigger upward momentum.
• Break below 24,800 → May open the door for deeper correction.

For now, a 'sell on rise' approach makes sense. Traders can expect sideways or volatile sessions before the important tariff announcement on August 27.