Nifty Slips as Sellers Defend Higher Levels; Consolidation Likely to Continue

Nifty ended the session at 25,942.10, down 0.38%, as the index once again failed to sustain its recent recovery attempt. The daily candle formation reflects renewed selling pressure, with the benchmark retreating after facing strong resistance in the 26,000–26,100 zone, an area that has repeatedly capped upside over the past few sessions.

From a technical standpoint, the index has slipped below its 20-day moving average, placed near 25,980, indicating a loss of short-term momentum and weakening bullish follow-through. However, Nifty continues to trade above the lower Bollinger Band, suggesting that while momentum has softened, the broader consolidation structure remains intact and there are no immediate signs of sharp volatility expansion.

Momentum indicators reinforce this cautious tone. The daily RSI has eased to around 49, slipping below the neutral mark and highlighting waning strength, while the MACD remains skewed on the downside, reflecting the lack of directional conviction. From a Fibonacci retracement perspective, the recent pullback has dragged the index below the 23.6% retracement, with the 50% retracement near 25,980 now being actively tested. A decisive break below this level could open the door toward the 78.6% retracement near 25,860, which stands out as a key near-term support zone.

On the upside, 26,000–26,050 remains the first resistance band, while 26,150 continues to act as a higher and more formidable hurdle for any sustainable rebound.

Derivatives Snapshot

Derivatives data reflect a cautious and guarded market stance. Call writers have added fresh positions at at-the-money and nearby strikes, reinforcing overhead supply and limiting upside attempts. A significant accumulation of nearly 2.30 crore call contracts at the 26,000 strike has firmly established this level as an immediate resistance zone.

On the downside, put writers have reduced exposure and rolled positions to lower strikes, signalling expectations of continued consolidation rather than an immediate breakout. The addition of around 1.13 crore put contracts at the 25,900 strike has created a strong support cushion on declines. The Put-Call Ratio (PCR) has slipped to 0.56, reflecting cautious sentiment and indicating that sellers continue to dominate at higher levels. However, with the ratio drifting toward the oversold zone, a minor short-covering bounce cannot be ruled out, especially if the index manages to defend the 25,900–25,860 support band.

Market Outlook

Overall, Nifty remains range-bound, but the near-term tone has weakened after repeated failures near higher levels. Unless the index regains and sustains above 26,150 on a closing basis, the outlook is likely to remain sideways with a negative bias, characterised by selective short-covering rather than a decisive directional move.