After a series of sideways trading sessions, the Nifty index continues to exhibit resilience, holding above crucial support levels. The index ended the session at 25,476.10, down by 46.40 points or 0.18%, reflecting some hesitation near resistance—but without compromising its broader bullish structure.
Flag Pattern Breakout Intact, But Momentum Lags
Nifty has already broken out of a falling flag pattern, a continuation formation that typically signals bullish momentum. However, the index failed to deliver a strong follow-through move in today’s session, as it faced stiff resistance near the 25,500–25,550 zone. The daily chart formed a tweezer top candlestick pattern, often interpreted as a short-term reversal signal, especially when seen near resistance levels.
Despite this, the index continues to sustain above the breakout neckline, suggesting that the underlying bullish trend remains intact, but is awaiting a fresh trigger to gain momentum.
Reliance IPO Buzz & Late Session Volatility
In the last 30 minutes of the session, the market saw sharp selling pressure attributed to negative headlines around Reliance Jio's IPO, which briefly dampened investor sentiment. Yet, Nifty managed to hold firm above key intraday support levels, underscoring the strength of demand around the 25,300–25,400 zone.
Technical Indicators Still Supportive
- The RSI (Relative Strength Index) is holding above 60, signaling a neutral to bullish bias.
- 10-day EMA (Exponential Moving Average) continues to act as a strong intraday support, currently placed around the 25,400 mark.
- The MACD remains in positive territory, with a bullish crossover intact, although momentum has slowed slightly.
If Nifty can decisively breach the 25,550 resistance, it could trigger short-covering rallies, with the potential to test the psychological milestone of 26,000 in the coming sessions.
Derivatives Snapshot: Resistance Holding, Caution Prevails
The derivatives market paints a mixed picture:
- Call writers are actively building positions at the 25,500 strike, which now holds the highest open interest (1.73 crore contracts), establishing it as a formidable resistance.
- Writers, on the other hand, are seen as active at the 25,400 level, which now acts as strong support with over 1.04 crore contracts.
The Put-Call Ratio (PCR) has declined sharply from 0.93 to 0.70, indicating a rising bearish bias, but mostly due to elevated call writing rather than strong bearish sentiment.
Max Pain:
Shifted to 25,500, suggesting this level could act as a gravitational zone going into expiry.
Volatility Remains in Check
- India VIX dropped by 2.09%, closing at 11.94, well below its danger threshold of 15.
- This low-volatility environment typically favors range-bound to upward movement, rather than sharp swings.
Market Outlook: All Eyes on 25,550–26,000 Zone
The near-term outlook for Nifty remains neutral to bullish, contingent on a decisive breakout above 25,550. A strong intraday close above this level, particularly with follow-through buying and rising volumes, could pave the way for 26,000, driven by short-covering and renewed investor confidence.
Key Levels to Watch:
Support Zone Resistance Zone Breakout Trigger
25,300–25,400 25,550–25,600 Above 25,550
Until such a breakout materializes, range-bound strategies, such as buying on dips around 25,400–25,350, may remain favorable for positional traders.
Conclusion
Nifty is showing healthy consolidation above key support, with its broader bullish pattern still valid. While immediate resistance at 25,550 poses a hurdle, sustained buying interest and a drop in volatility suggest that a breakout is possible in the near term. Traders should watch for signs of follow-through strength, especially during the opening and closing hours of the next session.
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