Nifty Extends Winning Streak Ahead of Bihar Polls; Breakout Above 25,950 Fuels Bullish Momentum

The Nifty index opened with a strong gap-up. It maintained upward momentum throughout the session ahead of the Bihar election outcome, marking its fourth straight day of gains and signalling a notable turnaround in market sentiment.

The index successfully crossed the crucial resistance of 25,800, backed by a bullish price gap, which strengthens optimism for a continued upside. This persistent pattern of higher closes underscores steady accumulation at lower levels and limited selling pressure from bears.

Market Performance Overview

On Wednesday, the Nifty advanced 180.60 points to settle at 25,875.80, forming a higher low and registering a decisive close above 25,800.
The breakout above the previous week’s high further reinforces the improving technical setup, indicating that buyers are regaining control over market direction.

Technical Analysis: Strength Above Key Moving Averages

From a technical standpoint, Nifty is comfortably trading above its 10-day and 20-day exponential moving averages (DEMA), which have now turned previous resistance zones into fresh support levels.

Holding above the gap-support range of 25,700–25,780 will likely sustain short-term momentum and support the ongoing bullish phase.

As long as the index holds above the 25,700–25,650 support zone, traders are expected to continue adopting a buy-on-dips strategy.

• Immediate resistance: 25,950
  
  
• Next key resistance: 26,000
  
  
• Support zone: 25,700–25,650
  
  

A convincing move above 25,950 could trigger fresh buying and extend the rally further. Conversely, a break below 25,650 may signal weakness and invite renewed caution among short-term participants.

Momentum Indicators: Bullish Setup Strengthens

Momentum indicators confirm the improving tone:

• The 14-day RSI has sustained above 60, signalling rising strength in short-term momentum.
  
  
• The MACD continues to narrow its negative spread, indicating reduced downside traction.
  
  

Hence, 25,650 remains a critical support, while 25,930–25,950 serves as the key resistance area in the near term.

Derivatives Snapshot: Bullish Bias Continues

The derivatives landscape remains bullish.
Put writers have aggressively added open interest (OI) at nearby strikes, while call writers are building positions at higher levels — reflecting a consolidation phase with a positive bias.

• Highest Call OI: 26,000 strike → 72.70 lakh contracts (strong resistance)
  
  
• Highest Put OI: 25,800 strike → 80.53 lakh contracts (solid support)
  
  
• Put-Call Ratio (PCR): Improved to 1.34 from 1.04, indicating strengthening bullish sentiment
  
  

The simultaneous additions in both call and put writing suggest a balanced yet optimistic stance, with traders expecting limited-range movement with an upward bias.

Market Outlook: Positive Bias, but FPI Outflows Remain a Risk

The Nifty’s structure remains strong, forming consistent higher lows and achieving a breakout above the previous week’s high — a clear indication of renewed bullish momentum.
The conversion of resistance zones into support further reinforces the short-term technical outlook.

However, persistent FPI outflows across both cash and futures segments over the past nine sessions continue to pose a risk factor, keeping broader sentiment cautiously optimistic.

While call writers remain active at higher strikes, the aggressive addition of puts at lower levels reflects a tactical standoff between bulls and bears, maintaining a positive yet range-bound setup.

• Bullish trigger: Sustained move above 26,000 → could ignite a stronger rally toward 26,100–26,250
  
  
• Bearish trigger: Break below 25,650 → may reopen short-term downside.
  
  

Until a decisive breakout occurs, traders should stay selective, focusing on momentum plays beyond the consolidation range while maintaining discipline in position sizing.