Nifty Ends Derivative Series on Weak Note; 25,000 Emerges as Crucial Make-or-Break Zone

Market Recap

The Nifty index wrapped up the monthly derivative series on a decisively weak footing, declining nearly 3.5% and slipping below its previous two-month low. While the index has attempted to build a tentative base around the 24,900–25,000 zone—aligned with the 10-month EMA and hovering near the 200-day EMA—this region now represents the final line of defence for bulls.

Despite repeated attempts, the index has failed to attract sustained follow-through buying, raising concerns over the durability of this support. Structurally, the broader trend remains firmly negative. Nifty continues to form lower tops and lower bottoms and has now logged its 14th consecutive session without closing above the previous day’s high, underscoring persistent supply pressure.

A decisive breakdown below the 24,900–25,000 band could further weaken sentiment and trigger accelerated selling pressure. Recent rebound attempts have consistently been sold into, with even minor pullbacks inviting fresh short positions. This highlights the absence of genuine buying interest as long as the index remains below the 25,500–25,600 zone, which is marked by the convergence of the 10- and 20-day EMAs and a key swing high. This area is expected to act as a strong supply zone on any recovery.

At present, Nifty remains locked in a broader range of 25,500 on the upside and 25,000 on the downside. Unless the index decisively breaks out of this band, sharp volatility is likely to persist in the near term. Continued trading below declining short-term moving averages reinforces overhead resistance and signals a gradual deterioration in market structure.

Session Highlights

Monday’s session was particularly erratic, characterised by low-quality price action around monthly expiry, offering little comfort to bulls. Although short-covering emerged from last week’s lows—largely driven by oversold conditions in heavyweight stocks—the move lacked conviction and failed to establish a sustainable reversal.

Nifty ended the session higher by 126.75 points at 25,175.40, reinforcing the view of a widening trading range and elevated volatility heading into the new series.

Technical View – Nifty

From a technical perspective, Nifty continues to display range-bound and indecisive behaviour, with market participants actively defending their respective levels. Repeated failures to reclaim immediate resistance during pullback attempts validate a sell-on-rise market environment.

• The 25,500–25,600 zone, which previously acted as a strong demand area, has now turned into a critical supply zone.
  
  
• On the downside, the 24,900–25,000 band, coinciding with the 200-day EMA, stands out as the key make-or-break level.
  

Momentum indicators continue to warrant caution. The RSI is hovering near 34, reflecting extremely weak momentum despite being close to oversold territory. A sustained break below 25,000 could intensify selling pressure, while any meaningful revival would require a firm and sustained move above 25,500–25,600.

Derivatives Snapshot

The derivatives setup continues to mirror the weakness seen on price charts:

• Call writers have aggressively added fresh positions at at-the-money and nearby strikes, effectively capping near-term upside.
  
  
• Put writers have shifted positions to lower strikes, indicating expectations of a bearish-to-range-bound market.
  

A significant open interest build-up of around 36.39 lakh contracts at the 25,500 call strike marks this level as a strong resistance. Meanwhile, the addition of nearly 41.83 lakh put contracts at the 25,000 strike reinforces this zone as a critical immediate support.

The Put–Call Ratio (PCR) has risen to 0.83 from 0.58, signalling heightened caution and continued dominance of call writers despite some defensive put writing at lower levels.

Market Outlook

Nifty has concluded the derivative series on a weak and vulnerable note after breaching its two-month low. While the index continues to hover near the 200-day EMA and defend the 24,900–25,000 support zone, every intraday recovery is being met with fresh selling pressure, keeping sustained buying interest elusive.

Occasional oversold bounces may occur, but the broader outlook remains guarded due to the absence of follow-through buying. The trading range is now clearly defined, with 25,500 acting as immediate resistance and 25,000 serving as critical support. The importance of the 25,000 level is amplified by the confluence of technical and derivatives-based support.

A decisive breakdown below 25,000 could open the door for a deeper correction toward 24,500. On the upside, any sustainable improvement in sentiment is likely only if Nifty holds decisively above 25,500. Until such confirmation emerges, sell-on-rise strategies are expected to dominate, and traders are advised to remain selective, disciplined, and cautious.