Nifty Nears Four-Month High; Sustained Momentum Signals Scope for Fresh Upside

The Nifty 50 index registered a robust bullish breakout on Thursday, inching closer to its four-month highs as bulls maintained a strong grip throughout the session. The day began with a sharp gap-up opening, and persistent buying pressure forced bears to unwind their short positions.

On Thursday, Nifty surged 261.75 points to close at 25,585.30, reaffirming the breakout and unlocking further upside potential. The index continues to maintain a solid bullish structure, with higher highs and higher lows, underscoring sustained upward momentum and investor confidence.

Technical Overview

From a technical standpoint, Nifty has posted a decisive breakout above the crucial 25,500 level, with every minor dip met with fresh buying. A follow-through move above Thursday’s high of 25,625 could extend the bullish momentum even further.

The index is comfortably trading above its 10-day and 20-day exponential moving averages, both of which are sloping upward around the 25,200 zone, signaling strong demand at lower levels.

The 25,200–25,300 range now serves as a vital buy-on-dips area for positional traders. On the upside, minor resistance is seen near 25,650–25,700, corresponding to previous swing highs. However, the prevailing higher-high and higher-low structure suggests that the probability of a breakout beyond this zone remains high.

As long as Nifty sustains above 25,300, the medium-term outlook remains constructive. Momentum indicators confirm strength, with the RSI (14) holding above 65, indicating strong upside momentum.

Key Levels to Watch

• Support Zones: 25,200–25,300 (strong demand area)
  
  
• Resistance Zones: 25,650–25,700 (previous swing high levels)
  
  

Derivatives Snapshot

The derivatives setup reflects a strong bullish undertone among market participants. Aggressive put writing has surpassed call writing, showing growing confidence at lower levels.

• Substantial open interest (OI) of 1.11 crore contracts at the 26,000 strike indicates key resistance.
  
  
• Hefty put OI of 1.13 crore contracts at the 25,300 strike highlights firm downside support.
  
  

Additionally, the shift of call positions to higher strikes, along with fresh put additions near current levels, points to renewed optimism in the near term. The Put-Call Ratio (PCR) surged to 1.54 from 1.23, signaling strengthening bullish sentiment.

While minor profit-taking may emerge, such dips are likely to attract fresh accumulation, given the robust technical setup.

Volatility Check

The India VIX rose 3.18% on Thursday but remains near historically low levels, indicating that traders are maintaining composure and emphasizing risk-managed strategies. The subdued volatility suggests a balanced market environment, supported by prudent hedging and stable global cues.

Market Outlook

The Nifty index has decisively broken above multiple resistance zones, reinforcing a strong bullish setup. Its position well above key short- and medium-term moving averages both sloping upward signals a firm underlying support base.

Consistent put writing at at-the-money strikes underscores traders’ conviction in the ongoing uptrend.

• Upside Scenario: A sustained move above 25,650 could trigger follow-up buying and short-covering, propelling Nifty toward 25,800 in the near term.
  
  
• Downside Scenario: Immediate support is placed around 25,300–25,350, where renewed buying interest is expected to cushion declines.
  
  

As long as the index trades above this key support cluster, bullish momentum is likely to persist. A Buy-on-Dips strategy remains favorable, with a decisive close above 25,650 confirming the next leg of the uptrend.