Nifty in Wait-and-Watch Mode; 25,200 Breakout May Trigger Rally

The Nifty index continues to trade in a narrow band, signaling a wait-and-watch approach among investors. Despite multiple intraday attempts, the index has struggled to decisively surpass the 25,200 resistance mark, even as it builds a strong base near the psychological 25,000 level. On Thursday, Nifty gained 135.65 points to close at 25,181.80, just below the crucial breakout zone.

The price action indicates early signs of a bullish continuation, but for now, the index remains trapped within a sideways consolidation zone between 24,900 and 25,200. Until a breakout occurs on either side, range-bound and choppy trade may persist.

Technical Overview

From a technical standpoint, Nifty continues to hover around the 25,000 mark, where several key supports converge. The 20-day and 50-day EMAs, along with the 0.382 Fibonacci retracement zone near 24,900, form a strong demand cluster—making this area a crucial “buy-on-dips” pocket.

On the upside, a clear breakout above 25,200–25,250 is required to trigger a strong short-covering rally and signal a resumption of the uptrend. Until that happens, the sellers are likely to remain active at higher levels.

Momentum indicators support this view —

• The RSI holds comfortably above the neutral 50 level, reflecting a sideways-to-positive bias.
  
  
• The MACD remains in a consolidation phase, suggesting that momentum could strengthen if prices sustain above resistance levels.
  
  

Key Levels to Watch:

• Support: 24,900 – 24,950
  
  
• Resistance: 25,200 – 25,250
  
  
• Breakout Target (on closing basis): 25,500
  

Derivatives Snapshot

Derivatives data reinforces the constructive undertone. The latest session witnessed aggressive put writing, bringing put positions nearly on par with call writers.

• A build-up of 1.06 crore contracts at the 25,200 strike confirms this level as a major pivot point.
  
  
• On the downside, 1.39 crore put contracts at the 25,000 strike underline strong support.
  
  
• The Put-Call Ratio (PCR) surged sharply to 1.00 from 0.63, indicating improving trader sentiment and expectations that the index will hold above key support levels.
  
  

This combination of call unwinding and put additions reflects a gradual shift toward bullish bias with limited downside risk.

Volatility Check

The India VIX eased 1.87% on Thursday, continuing its moderation from historically low levels. The decline in volatility indicates that traders are maintaining disciplined risk management through protective hedges, signaling a controlled yet optimistic market setup.

Market Outlook

Nifty’s ability to consistently hold above 25,000 is a positive sign. The price pattern, along with strong put writing at lower strikes, suggests that the bulls are quietly regaining control. A decisive close above 25,200 will be the key trigger to ignite a short-covering rally, potentially driving the index toward 25,500 in the near term.

Until a breakout unfolds, traders should continue to adopt a buy-on-dips strategy, focusing on accumulating near the 24,900–25,000 zone while monitoring 25,200 as the breakout level to confirm the next upward move.