Profit Booking Caps Nifty Upside: Index Consolidates Between 24,500 and 25,000

The Indian equity market witnessed a muted session on Thursday, as profit booking capped Nifty’s early gains. Despite a gap-up opening fueled by optimism around GST reform developments, the index failed to maintain its upward momentum, signaling a cautious market sentiment.

Nifty : Early Gains Eroded

The Nifty 50 index opened on a positive note but surrendered nearly all intraday gains. On the daily chart, it formed a bearish Marubozu candle, reflecting cautious undertones among traders. By the close of trading, Nifty managed a modest gain of 19.25 points, settling at 24,734.30.

Intraday activity revealed heavy selling pressure, with the day’s opening level coinciding with the session high. Despite this, Nifty has closed above its previous day’s low for the fourth consecutive session, indicating that the bearish momentum is yet to fully materialize.

Technical Outlook: Consolidation Persists

From a technical standpoint, Nifty continues to lack a clear directional trend. Bulls and bears have alternated dominance, keeping the index trapped within a broad consolidation band of 24,500–25,000. Analysts suggest that only a decisive breakout beyond this range will trigger meaningful momentum, either on the upside or downside.

Derivatives Snapshot: Call & Put Activity

The options market highlighted cautious sentiment:

• Call writers are outpacing put writers, indicating limited confidence in further upside.
  
  
• The 25,000 strike saw open interest surge to 1.83 crore contracts, marking it as a significant resistance level.
  
  
• The 24,500 strike attracted the highest put open interest at 1.29 crore contracts, establishing a key support zone.
  
  

The Put-Call Ratio (PCR) fell sharply from 1.21 to 0.73, signaling an increase in bearish bets. However, traders are waiting for a decisive price movement to confirm the trend.

Volatility Check: India VIX Trends Lower

India VIX edged lower by 0.77% to 10.85, suggesting a cooling in market volatility. The muted VIX reading reflects a range-bound market rather than panic-driven selling. Traders remain cautious, refraining from aggressive hedging strategies amid the sideways movement.

Market Outlook: Range-Bound Action Likely

Nifty remains directionless, with every intraday rise met by profit booking across sectors. The index finds itself boxed between the psychological hurdle of 25,000 on the upside and support at 24,500–24,400.

Key observations:

• Heavy clustering of call and put positions at critical levels reinforces the sideways trajectory.
  
  
• A breakout above 24,900 could trigger short covering and pave the way for a rally.
  
  
• Until a decisive move occurs, range trading between 24,400 and 24,900 remains the preferred approach.
  
  

Traders are advised to adopt a cautious stance, focusing on intraday swings rather than chasing momentum in a market that continues to consolidate.