Nifty ends muted amid tug-of-war between buyers and sellers

Derivatives Analysis Report: Dhupesh dhameja, Derivatives Research Analyst, SAMCO Securities

Nifty index witnessed yet another volatile and range-bound trading session, where the benchmark failed to sustain intraday recovery and eventually settled marginally lower by 4.30 points at 23,654.70 (-0.02%). Despite intermittent buying attempts during the session, the index continued to face supply pressure near higher levels, highlighting that market participants remain cautious ahead of a decisive directional breakout.

On the daily chart, the index continues to trade below the falling 20-DEMA placed near 23,800, which is acting as a strong dynamic resistance zone. The repeated inability to sustain above this moving average reflects that short-term momentum still remains weak, as sellers continue to dominate near resistance levels. However, unlike the earlier sharp decline, the recent candles indicate reduced downside momentum and emergence of selective buying interest near lower levels, suggesting that the market is attempting to establish a near-term base. The 23,750-23,850 zone has emerged as a crucial hurdle for the bulls, as repeated rejection from this area confirms strong overhead supply.

On the lower side, buyers are consistently protecting the 23,400-23,300 region, resulting in a compressed trading structure indicates a temporary equilibrium is reached between buyers and sellers. Momentum indicators also continue to reflect a lack of aggressive directional strength. The RSI on the daily chart is placed near 45.55, indicating neutral-to-cautious momentum. India VIX declined sharply by 3.35% and closed near 17.82, indicating easing volatility and cooling market fear.

From the derivatives perspective, the options data also reflects a neutral-to-range-bound undertone. The PCR stands near 0.94, indicating balanced positioning between put and call writers. Significant call writing is visible near the 23,800-24,000 strike region, highlighting strong resistance at higher levels, while put writers continue to defend the 23,500-23,300 zone, indicating that downside support remains intact for now. Overall, the market structure suggests that Nifty is currently in a time-wise corrective phase, going ahead, a decisive close above the 23,800 zone could trigger short covering and improve sentiment toward 24,000-24,250 levels, while failure to hold above the lower consolidation base may once again invite volatility in the coming sessions.

Source : Equity Bulls

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