Nifty Hovers Near Make-or-Break 25,500 Level; Technical Structure Turns Fragile

Persistent Weakness and Selling Pressure

The Nifty index continued to display weakness, showing no signs of recovery and extending its bearish tone for the fifth consecutive session. Each minor rebound has been met with fresh selling, indicating that sellers continue to dominate the market structure.

On Thursday, the index fell 87.95 points to close at 25,509.70, marking yet another session below the previous day’s low. The index now hovers around the crucial 25,500 mark, which has become a make-or-break level for short-term direction.

The pattern of lower highs and lower lows reflects a deteriorating structure, signaling the potential for an extended corrective phase if the index fails to stabilize soon.

Technical Setup: Fragile and Range-Bound

From a technical standpoint, the Nifty remains in a bearish-to-range-bound setup as long as it fails to sustain above 25,800. The index’s close below the 20-day exponential moving average (20-DEMA) and the 0.382 Fibonacci retracement level highlights fading bullish momentum and weakening short-term sentiment.

Unless the Nifty reclaims the 25,800–25,900 zone, short sellers are expected to stay active, capitalizing on intraday bounces to initiate fresh short positions.

On the downside, immediate support lies near 25,350, which aligns with the 0.50 Fibonacci retracement level. A sustained breach below this zone could accelerate the downside and trigger further selling. Conversely, only a firm breakout above 25,800 would neutralize the bearish tone and revive near-term optimism.

Momentum Indicators Point to Weakness

The momentum indicators reinforce the cautious sentiment:

• The RSI (14) has slipped below the neutral 50 mark, reflecting a loss of bullish strength.
  
  
• The MACD remains below the signal line, signaling weak momentum.
  
  

Overall, 25,350 remains the key support to watch, while 25,750–25,800 continues to act as a stiff resistance zone.

Derivatives Snapshot: Cautious Tone Prevails

Derivatives data mirrors the defensive stance seen in the cash market.

• Call writers have aggressively added positions at higher levels, particularly at the 26,000 strike, where 1.29 crore contracts of open interest have accumulated — creating a firm resistance cap.
  
  
• Put writers, on the other hand, have shifted focus toward lower strikes, with 86.40 lakh contracts at the 25,000 strike, providing limited support below current levels.
  
  

The Put-Call Ratio (PCR) stands near 0.63, reflecting cautious sentiment and continued dominance of sellers at higher zones.

Market Outlook: Bias Remains Negative

The Nifty’s technical structure continues to weaken, with every bounce inviting renewed supply. The lower-high, lower-low formation, combined with persistent FPI selling in both cash and derivatives segments, underscores bearish undertones in the near term.

As long as the index trades below 25,800, sellers are expected to remain in control.
A break below 25,480 could trigger an accelerated decline, while only a decisive move above 25,800 would indicate a potential short-term reversal.

Trading Strategy:
Traders are advised to maintain a sell-on-rise approach, focusing on short opportunities near resistance levels while adopting a disciplined and cautious stance amid current volatility.

Key Levels to Watch