Nifty Drifts Sideways; Buyers Remain Hesitant While Sellers Hold the Upper Hand

The Nifty index continued to drift sideways, reflecting uncertainty among traders as it hovered near a crucial support zone around 25,350. Despite intraday rebounds driven by short-covering, sustained selling pressure at higher levels kept the index range-bound. For the sixth consecutive session, Nifty failed to surpass its previous day’s high — signaling weak follow-through buying and growing caution among investors.

Market Performance

On Friday, the benchmark index slipped 17.40 points to close at 25,492.30, marking another session below the prior day’s low. The repeated pattern of lower highs and lower lows indicates waning bullish momentum and an underlying bearish undertone.

Profit booking dominated the session as traders refrained from aggressive long positions, awaiting a decisive breakout above key resistance levels.

Technical Analysis

Technically, Nifty is oscillating between its 20-day exponential moving average (20-DEMA) at 25,589 and 50-DEMA at 25,329. This narrow trading band highlights a phase of consolidation.

Trading below the 20-DEMA and the 0.382 Fibonacci retracement level suggests that bullish momentum remains under pressure. Until Nifty reclaims the 25,800–25,900 resistance zone, sellers are expected to capitalize on every minor rebound.

• Immediate Support: 25,350 (aligned with the 0.50 Fibonacci retracement level)
  
  
• Resistance Zone: 25,750–25,800
  
  
• Breakdown Point: Below 25,350, the index may witness accelerated selling pressure.
  
  
• Reversal Trigger: A decisive close above 25,800 could shift sentiment back to bullish.
  
  

The RSI (14) has dropped below the neutral 50 mark, reflecting weakening momentum and suggesting that upside potential remains capped in the near term.

Derivatives Data Snapshot

The derivatives segment reflects a mixed and cautious tone:

• Call Writers: Aggressively added positions at higher strikes, particularly the 26,000 call, which holds a massive 1.52 crore open interest contracts, indicating strong resistance overhead.
  
  
• Put Writers: Added positions at lower strikes, mainly the 25,300 put, holding 1.25 crore OI contracts, suggesting limited downside support.
  
  
• PCR (Put-Call Ratio): Rose to 0.88 from 0.63, showing a mild shift toward neutrality and cautious optimism among traders.
  
  

This balanced buildup of positions indicates a consolidation phase, where both buyers and sellers are maintaining control over their respective zones.

Market Outlook

The Nifty index is currently attempting to form a short-term base near its critical support level, but confirmation of a trend reversal is still pending. The continued pattern of lower highs, combined with Foreign Portfolio Investor (FPI) outflows over the last five sessions, underscores the cautious tone in the market.

For now, the overall sentiment remains neutral to mildly bearish. A break below 25,350 may trigger fresh selling, while a close above 25,700–25,800 is essential to revive positive momentum.

Trading Strategy for the Near Term

• Approach: Cautious and range-bound.
  
  
• Bias: Neutral to bearish unless Nifty breaks above 25,800.
  
  
• Actionable Idea: Maintain a sell-on-rise approach; look for shorting opportunities near resistance zones.
  
  

Key Takeaways

• Nifty remains under pressure amid weak buying interest.
  
  
• Range-bound movement expected between 25,350 and 25,800.
  
  
• Market structure hints at indecisive sentiment with short-term weakness.
  
  

Watch for breakouts from the current consolidation zone for directional clarity.