Nifty Consolidates in a Tight Band; Sustained Strength Above 25,700 Keeps Broader Uptrend Intact

The Nifty index continued to display remarkable resilience on Thursday, even as it remained confined within a narrow trading band, signaling time-wise consolidation after its recent strong rally. Despite the lack of a clear directional bias, the index continues to respect prior swing lows and sustain above key support levels, reaffirming its broader bullish trend.

Nifty Index Overview

The Nifty 50 slipped 176.05 points to close at 25,877.85, following a mild bout of profit booking after failing to sustain above the crucial 26,000 mark. This decline formed a narrow consolidation zone just above the breakout neckline — a sign of healthy time-based correction amid continued follow-through buying interest.

From a technical standpoint, the index has established a strong base near the 25,700 level, coinciding with its breakout neckline and earlier swing lows. Moreover, sustaining above the 10-day and 20-day exponential moving averages (DEMA) underscores a bullish undertone.

The 25,700–25,800 range remains a key accumulation pocket, supported by multiple technical confluences. On the higher side, immediate resistance is placed around 26,100–26,150, which also aligns with the recent swing highs and a potential double-top formation.

Unless Nifty decisively clears this resistance zone, the medium-term outlook remains cautiously optimistic within the prevailing range-bound structure.

• Support: 25,700–25,800
  
  
• Resistance: 26,100–26,150
  
  

Momentum indicators continue to signal strength, with the RSI (14) holding comfortably above 60, confirming sustained bullish momentum despite the current consolidation phase.

Derivatives Snapshot

The derivatives data reveal a cautious undertone, with call writers aggressively building positions at higher levels. Active participation from both long and short build-ups indicates a range-bound yet positively biased setup.

Key open interest (OI) data points include:

• 26,000 Call Strike: 1.66 crore contracts — marking a strong resistance zone.
  
  
• 25,500 Put Strike: 77.60 lakh contracts — indicating robust support at lower levels.
  
  

The balanced OI distribution between calls and puts suggests that Nifty may continue oscillating within a defined range in the near term. Meanwhile, the Put-Call Ratio (PCR) declined sharply to 0.60 from 1.05, reflecting cautious sentiment and hinting at the possibility of short-term consolidation or mild profit booking before the next directional move.

Market Outlook

After a strong rally in recent weeks, the Nifty index now appears to be cooling off through a time-based consolidation phase. The ongoing pause is considered constructive, as it allows the index to absorb recent gains while maintaining its higher high–higher low formation on the broader chart structure.

A decisive breakout above 26,100 could trigger fresh long build-ups and short covering, potentially propelling the index toward 26,300 in the near term. On the flip side, strong buying support is expected to emerge within the 25,700–25,800 zone, which remains a key demand area for positional traders.

Until a breakout or breakdown occurs, the broader trend is expected to stay range-bound. Traders should maintain a range-trading strategy, focusing on buying near strong support levels and booking profits near resistance zones.

Key Technical Highlights

• Nifty remains in a strong uptrend, holding well above its key EMAs.
  
  
• Consolidation between 25,700 and 26,150 represents a healthy pause within the larger bullish structure.
  
  
• RSI above 60 continues to signal underlying strength.
  
  
• PCR decline to 0.60 indicates cautious but steady positioning among market participants.
  
  

Trading Strategy for Traders

• Buy on dips near 25,700–25,800 with a stop-loss below 25,650.
  
  
• Book profits around 26,100–26,150 unless a breakout occurs.
  
  
• A close above 26,150 could open the door for a move toward 26,300–26,350.