Orderly Profit Booking Keeps Nifty Range-Bound; Broader Uptrend Remains Intact

Market Overview

The Nifty 50 continues to witness orderly profit booking, characterised by muted momentum rather than any signs of structural weakness. The benchmark remains well-positioned within its upward-sloping price channel, currently hovering near the lower band of the formation—an area that has emerged as an important technical support zone.

Wednesday’s trading session remained largely range-bound and subdued, though the index staged a swift rebound from intraday lows, highlighting the presence of buying interest at lower levels. Despite this recovery, the Nifty closed 37.95 points lower at 26,140.75, reinforcing the view that the recent move represents healthy consolidation rather than exhaustion of the prevailing uptrend.

Technical View: Consolidation Within a Rising Structure

From a technical perspective, the index has struggled to sustain higher levels over the past three sessions, registering lower closes below previous highs. This behaviour confirms a re-entry into a consolidation phase, further validated by the formation of two consecutive indecision candles on the daily chart.

That said, the broader technical setup remains constructive. The Nifty continues to trade comfortably within its rising channel and, crucially, remains above the 20-day Exponential Moving Average (DEMA)—which is acting as immediate dynamic support. This indicates that declines are being actively absorbed by buyers, preserving the underlying bullish bias.

The 26,000–26,100 zone has now emerged as a key make-or-break region. Earlier a resistance band, this area has successfully transitioned into a strong support base. As long as the index sustains above this zone, the probability of follow-through buying remains high.

Momentum indicators suggest consolidation rather than weakness:

• RSI is hovering just above the 50 mark, reflecting a pause in momentum
• Holding above the psychological 26,000 level keeps the buy-on-dips strategy relevant

On the upside, a decisive breakout above 26,350–26,370 could open the door for fresh all-time highs near 26,500.

Derivatives Snapshot: Range-Bound Bias With Positive Undertone

The derivatives setup aligns with the current sideways-to-positive market bias. Call writers have added fresh positions at at-the-money and near-term strikes, effectively capping immediate upside. Meanwhile, put writers continue to hold sizeable positions at lower strikes, signalling expectations of consolidation rather than a sharp directional move.

• Strong put open interest of ~68.71 lakh contracts at 26,100 firmly establishes this level as immediate support
• Call OI addition of ~84.78 lakh contracts at 26,200 highlights a near-term resistance ceiling

The Put-Call Ratio (PCR) remains largely unchanged at 0.77 (from 0.73), reflecting heightened caution and increased seller activity at higher levels, while still maintaining a broadly supportive undertone.

Market Outlook

The broader trend for Nifty remains intact, with the index holding above the 20-DEMA and continuing to form a higher-low structure within a rising channel. The inability to sustain at elevated levels appears to be a case of healthy profit booking, not a breakdown of trend.

Strong demand continues to emerge near support zones, highlighting sustained investor confidence. The 26,100–26,200 band will be critical for maintaining near-term stability. Continued participation from put writers around at-the-money strikes reinforces optimism that the larger trend remains supportive.

• A sustained move above 26,370 could trigger short covering, propelling the index toward 26,500
• Any dip toward 26,000 is likely to attract buying interest, keeping the buy-on-dips approach firmly in play

Until a decisive breakout or breakdown occurs, Nifty is expected to remain range-bound with a positive bias, consolidating gains before the next directional move.