Market Recap
The benchmark Nifty index continues to trade under sustained bearish pressure, with no convincing signs of a trend reversal so far. Although the index witnessed marginal short-covering near the psychological 25,000 level, the rebound failed to convert into a positive close, highlighting the absence of strong buying conviction.
Notably, Nifty has now logged 12 consecutive sessions without closing above the previous day’s high, underscoring persistent selling dominance. While the index has managed to defend its key psychological support, the recent bounce appears largely driven by oversold conditions rather than fresh long accumulation.
The index is currently hovering near its 200-day Exponential Moving Average (EMA), coinciding with the critical 25,000 zone, which has clearly emerged as a make-or-break level for near-term direction. Despite holding this support so far, Nifty has struggled to generate any meaningful momentum, reflecting a gradual deterioration in the broader market structure.
Multiple earlier support zones have now turned into strong resistance levels, reinforcing the fragile setup. Unless the index decisively sustains above the 25,500 swing high, which also aligns with the 10-day EMA, selling pressure is likely to re-emerge at higher levels.
Wednesday’s session remained volatile, with bears largely controlling the undertone. Although the index attempted an intraday recovery from lower levels, the bounce lacked durability and eventually faded. Nifty closed marginally lower by 75 points at 25,157.50, reinforcing expectations of heightened volatility and range-bound trade in the near term.
Technical View
From a technical standpoint, Nifty has formed an indecisive candlestick near a critical inflection zone. While the market is trading in an oversold region, repeated failures to reclaim the previous day’s high continue to reflect strong supply near resistance areas.
The ongoing formation of lower highs, coupled with selling pressure on every intraday rebound, clearly highlights a sell-on-rise market behaviour, with bears firmly in control. The broader trend remains fragile, and while intermittent short-covering rallies may continue, such moves risk turning into bull traps unless key resistance levels are reclaimed.
Nifty continues to trade below all major short-term moving averages, which are sloping downward—confirming strengthening downside momentum. The 25,300–25,500 zone, which earlier acted as a strong demand area, has now transformed into a key supply zone.
On the downside, the 25,000 level, along with 24,900, aligned with the 200-day EMA, is expected to act as an important near-term base. Momentum indicators, however, continue to warrant caution. The Relative Strength Index (RSI) is hovering near the 27–28 zone, reflecting extreme bearish momentum and oversold conditions, but without any confirmed reversal signal yet.
A decisive breakdown below 25,000 could intensify selling pressure, while any meaningful revival in sentiment would require a sustained move above the 25,300–25,500 band.
Derivatives Snapshot
The derivatives setup mirrors the weakness seen in the cash market. Call writers have aggressively added fresh positions at at-the-money and nearby strikes, effectively capping near-term upside. At the same time, put writers have concentrated positions at lower strikes, suggesting expectations of a range-bound market with limited immediate downside.
A significant open interest build-up of around 1.16 crore contracts at the 25,500 Call strike highlights this level as a strong resistance zone. Meanwhile, the addition of nearly 92.19 lakh Put contracts at the 25,000 strike reinforces the importance of this area as immediate support.
The Put–Call Ratio (PCR) has risen to 0.68 from 0.58, indicating elevated caution and continued dominance of call writers, despite some defensive put positioning at lower levels.
Market Outlook
Nifty remains firmly entrenched in a bearish phase, with every intraday recovery encountering selling pressure. Despite occasional oversold bounces, the lack of sustained buying interest keeps the overall outlook guarded.
Trading below key short- and medium-term moving averages, the index structure remains weak. The presence of a doji formation near the 200-day EMA further underscores the importance of the current make-or-break zone.
The near-term trading range is now clearly defined:
- Resistance: 25,500
- Support: 25,000
A decisive breakout on either side is likely to determine the next directional move. The 25,000 level assumes added significance due to the confluence of technical and derivatives-based support. A breakdown below this zone could open the door for a deeper correction toward 24,700.
On the upside, a sustainable improvement in sentiment is likely only if the index manages to hold above 25,500. Until such confirmation emerges, sell-on-rise strategies are expected to dominate, with traders advised to remain selective, disciplined, and cautious.
Looking ahead, market participants will closely track FII positioning, which remains in oversold territory, along with global developments, particularly political cues and rhetoric involving Donald Trump, as these factors could influence near-term sentiment and add to market volatility.
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