Nifty Struggles for Direction: 26,000 Caps Upside, 25,500 Holds the Key

Market Recap: Volatility Persists, Sellers Retain Control

The Nifty 50 continued to struggle for clear direction, remaining under selling pressure for most of Tuesday’s session. Although some short covering emerged toward the close, it was not strong enough to push the index into positive territory. Importantly, the benchmark managed to close above the previous day’s low, but signs of a sustainable revival remain elusive.

The index ended the session lower by 57.95 points at 25,732.30, reflecting continued uncertainty and reinforcing the view of a widening trading range in the near term. Intraday volatility remained elevated, with bears largely dictating the tone despite sharp rebounds from lower levels.

Nifty Trading Between Key Moving Averages

From a trend perspective, Nifty is currently oscillating between its 20-day and 100-day exponential moving averages (EMA). The 20-day EMA is acting as immediate resistance, while the 100-day EMA is providing crucial support, highlighting the absence of strong directional conviction.

Encouragingly, the index continues to defend the 25,700 demand zone, which aligns closely with the 100-day EMA. However, unless Nifty can decisively sustain above the psychological 26,000 mark, selling pressure is likely to persist at higher levels.

Technical View: Range-Bound Structure Intact

Technically, the index continues to attract buying interest near lower levels. This is evident from the formation of consecutive candlesticks with long lower shadows, suggesting dip-buying activity around support zones.

That said, the broader market structure remains range-bound. Nifty is currently confined within a 25,500–26,000 trading band, and a decisive breakout on either side is required to determine the next directional move.

Key Technical Levels to Watch

• Resistance: 25,900–26,000 (now a strong supply zone)
  
  
• Immediate Support: 25,600–25,500 (100-day EMA confluence)
  
  
• Downside Risk Below: 25,500 → 25,350
  
  

The Relative Strength Index (RSI) continues to hover near the 40 mark, indicating sideways-to-bearish momentum. A sustainable recovery would require the index to reclaim and hold above the 26,000–26,100 zone, which could revive bullish sentiment meaningfully.

Derivatives Snapshot: Call Writers Dominate

The derivatives setup mirrors the cautious-to-bearish undertone seen in the cash market.

• Heavy call writing has been observed at at-the-money and nearby strikes, effectively capping upside potential.
  
  
• Put writers have added positions at lower strikes, signalling expectations of range-bound trade rather than aggressive downside.
  

Key Open Interest Levels

• 25,600 Put: ~28.55 lakh contracts added → strong near-term support
  
  
• 26,000 Call: ~67.09 lakh contracts added → firm resistance ceiling
  
  

The Put–Call Ratio (PCR) has dropped sharply to 0.59 from 0.87, reflecting heightened caution and the continued dominance of call writers.

Market Outlook: Range Trading Likely to Continue

Nifty has yet to decisively arrest the recent selling pressure. While intraday rebounds indicate the presence of buyers near support, the lack of strong follow-through buying keeps the broader outlook guarded.

The trading range is now clearly defined:

• Upside Cap: 26,000
  
  
• Key Support: 25,500
  
  

The 25,500 zone assumes critical importance due to the confluence of technical support and heavy put open interest. A decisive breach below this level could accelerate selling pressure, opening the door for a deeper correction toward 25,350.

On the upside, only a sustained move above 26,100 would indicate a meaningful revival in bullish momentum. Until then, range-bound and selective trading strategies are likely to dominate, with traders advised to remain cautious amid ongoing volatility.