Nifty’s August Series Ends Weak; Sell-on-Rise Strategy Favoured

Nifty Ends August Series on a Weak Note

The Nifty index shed over 400 points in the past two sessions, erasing gains built on GST reform optimism. The August series closed with the index slipping into a fragile technical setup.

On the daily chart, Nifty formed two consecutive strong bearish candles, each closing below the prior day’s low — a clear signal of ongoing market weakness.

• Index closed at 24,500.90, down 211.15 points.

• Nifty is now trading below all major support zones, pushing resistances lower.

• The immediate support zone lies at 24,450–24,500, with Fibonacci extension around 24,490 adding importance.

• Resistance has shifted lower to 24,700–24,800, now acting as a supply zone.

Unless the index decisively reclaims 24,800, selling pressure is expected to dominate any rebound attempts.

Technical Setup: Weak Structure Persists

• Moving Averages: Nifty trades below its 20, 50, and 100-day EMAs, which are likely to act as hurdles during any rebound.

• RSI: Hovering just below 40, signaling a sideways-to-bearish undertone.

• Short-Term Pullback? Lower timeframes entering oversold territory suggest a possible short-lived bounce, though broader weakness prevails.

🔑 Outlook: Unless Nifty convincingly closes above 24,800, any pullback is likely to face heavy supply.

Derivatives Snapshot: Options Data Reflects Caution

The options market supports the weak trend, with call writers dominating near key resistance levels.

• 24,800 strike saw heavy call writing, with open interest jumping to 77.36 lakh contracts — making it a strong ceiling.

• 24,500 strike carried the second-highest put open interest at 49.76 lakh contracts, offering near-term support.

• However, shift of put writing to lower strikes reflects low confidence in sustainable upside moves.

• PCR rose from 0.56 to 0.64, still signaling supply pressure at higher levels.

Volatility Check: Calm Before the Next Move?

The India VIX slipped 0.12% to 12.17, remaining subdued despite global uncertainties.

• A low VIX suggests consolidation, not a panic-driven correction.

• Market participants are exhibiting cautious optimism, avoiding aggressive hedging strategies.

Market Outlook: Sell-on-Rise Remains Prudent

The August series closed with Nifty breaking crucial supports and drifting into a weak structure.

• Bearish triggers: Call writing near 24,800, unwinding of puts, and resistances shifting lower.

• Support to watch: Holding above 24,450 is essential to avoid deeper downside.

• Trading Strategy: Until the index clears 24,800 convincingly, the broader setup favors a sell-on-rise approach.

👉 Traders may look for minor rebounds in oversold conditions as opportunities to re-enter shorts, with a cautious stance until trend reversal signals emerge.