NIFTY 50 Engulfs Four-Day Gains in One Blow; Downside Risks Intensify

Market Recap: Bears Take Control

Nifty erased four sessions of gains in a sharp decline, closing 365 points lower at 25,454.35. Sustained selling pressure dragged the index below key technical levels, marking a decisive shift in momentum toward the bears.

The breakdown places the benchmark at a crucial technical juncture.

Technical Analysis: Structure Weakens

• Break Below 25,500: Disrupts the higher-low formation seen earlier.
• Critical Support Zone: 25,300–25,350 — must hold to prevent deeper correction.
• Below 10 & 20-day EMAs: Signals deterioration in short-term momentum.
• Immediate Resistance: 25,600 — reclaiming this level is essential for stability.
• RSI Below 50: Confirms bearish undertone and weakening buying strength.

Unless Nifty reclaims 25,600 decisively, rebound attempts are likely to face selling pressure.

Derivatives Data: Bearish Sentiment Builds

Options positioning reflects caution and rising defensive strategies:

• 25,800 Call OI: 1.47 crore contracts — strong resistance zone
• 25,000 Put OI: 1.00 crore contracts — near-term support base
• Put–Call Ratio (PCR): 0.56 — indicates bearish bias

Aggressive call writing near at-the-money strikes suggests traders are positioning for limited upside. However, brief short-covering rallies cannot be ruled out.

Key Levels to Watch

• Immediate Support: 25,350
• Secondary Support: 25,200
• Immediate Resistance: 25,600
• Major Resistance: 25,800

A sustained break below 25,350 could accelerate long unwinding toward 25,200.

Strategy & Outlook

The tactical approach now shifts to “Sell on Rise.”

• Any bounce toward 25,600 may attract fresh selling.
• Failure to hold 25,350 could deepen corrective pressure.
• Only a decisive close above 25,600 would negate the near-term bearish bias.

Until key resistance levels are reclaimed, the broader market structure favors caution with elevated downside risks.