The Indian stock market had a turbulent start to the trading day, as geopolitical tensions rattled global sentiment and triggered a sharp gap-down opening. But the Nifty had other plans.
Despite a shaky start, the index staged a smart recovery, showcasing the underlying strength of the market and growing investor confidence. By the session's close, the Nifty had clawed back most of its losses, ending just shy of the psychologically important 25,000 mark.
A Bounce That Speaks Volumes
The Nifty 50 opened under pressure, dipping sharply as global cues turned negative. However, the index found strong support near the 24,750–24,700 zone—a level that has consistently offered a safety net in recent weeks. What followed was a steady and determined rebound throughout the day.
By the end of the session, the index closed at 24,971.90, down 140.50 points. Notably, the day's price action formed an inside bar, accompanied by a Doji on the daily chart—classic signs of indecision and a tug-of-war between bulls and bears.
Technical Analysis: Bulls Need to Break 25,200
While today's rebound was reassuring, the Nifty is still struggling to break past the 25,200–25,230 resistance zone. This level has acted as a ceiling in recent sessions, and only a decisive close above it can pave the way for a fresh leg higher.
Should that breakout happen, traders can look for upside targets around 25,400–25,500, aided by potential short-covering rallies.
On the downside, the 24,750–24,700 support range remains crucial. As long as the index stays above this zone, the underlying trend remains constructive.
Adding to the bullish case, the 10-day and 20-day exponential moving averages (EMAs) are acting as dynamic support levels—signs that the trend remains in favor of the bulls.
Derivatives Data: Signs of Cautious Optimism
The F&O space is echoing the sentiment of measured optimism:
- Put writers were active at the 24,900 strike, writing over 84 lakh contracts—a sign of confidence in the support zone.
- Call writers, meanwhile, have shifted their focus to the 25,000 strike, where open interest now exceeds 1.11 Crore contracts, making it the next significant resistance.
- The Put-Call Ratio (PCR) rose to 1.03 from 0.86, indicating a rise in put writing, typically a bullish signal.
- The maximum pain for the day settled at 24,800, suggesting a potential expiry gravitation point near that level.
Volatility: Nerves Settle by the Close
The India VIX, a gauge of market volatility, spiked in early trade amid rising tensions. But as the session progressed, fear levels receded. The VIX ended 2.74% higher at 14.04, still well below the psychological 15-mark.
This moderation in volatility signals that market participants are growing more confident and that any intraday panic is being viewed as a buying opportunity rather than a reason to exit.
Market Outlook: Breakout or Breakdown?
The market's ability to rebound from a sharp sell-off reveals a great deal about the current bullish undertone. As long as the Nifty continues to hold the 24,700 support level, the bias remains positive.
Key levels to track:
- A sustainable move above 25,200–25,230 could open the gates for a swift move to 25,500.
- A break below 24,700, however, would be the first sign of weakness, though as of now, buyers are defending dips with confidence.
Final Thoughts: Confidence Builds, But Caution Persists
Nifty may have ended in the red, but the strong intraday recovery tells a much more bullish story. The market demonstrated that it remains willing to buy the dip, especially near key support levels.
Yes, 25,200 is proving to be a tough nut to crack—but if and when that level breaks, we could see a quick surge higher. Until then, expect the index to trade within a defined range, with dips continuing to attract buyers.
As always, confirmation is key. Wait for a breakout before making an aggressive move. However, for now, the buy-on-dips strategy remains intact, supported by strong technical indicators and improving sentiment in derivatives.
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