Can Sensex, Nifty carry their rally into a sixth day? Key levels to monitor on August 21

Here are the important levels to watch out for in today's session

Nifty continues to exhibit resilience, led by strength in IT counters, while sustaining above the 25,000 mark has confirmed follow-through bullish momentum. Notably, major call writers have begun shifting their positions to higher strikes, adding further conviction to the bullish structure. A sustained push beyond 25,100 is likely to reignite strong upward momentum towards 25,250, forcing significant call writers into short-covering, thereby accelerating gains. On the flip side, support zones have shifted higher, with dips toward 24,800 expected to attract accumulation. Firm positioning by Put writers near at-the-money strikes lends additional support to this constructive view. Unless the index decisively breaches 24,770, the bulls are expected to retain the upper hand. For now, a “buy-on-dips” strategy remains the most prudent play, with traders eyeing a breakout above 25,200 to confirm the next leg of upside momentum.

"Nifty Bank index is struggling to establish positive momentum as leading banking heavyweights are yet to deliver decisive strength, resulting in choppy moves. The immediate hurdle lies in the 55,800–56,000 zone, and only a breakout above this band could unleash strong bullish momentum, fueled by short-covering. On the downside, dips toward 55,500 continue to be seen as attractive accumulation zones, supported by firm put writing activity at near-the-money strikes," Dhupesh Dhameja of SAMCO Securities said. "A breach below 55,450, however, would signal early weakness and could push the index lower toward the 55,000 mark. Until then, sideways action is likely to prevail. In the current environment, a “range-trading” strategy remains the most prudent approach, with traders keeping a close watch on 56,000 for a potential upside breakout, and 55,450 as the level to watch for a downside breakdown that may resolve the ongoing consolidation, he added.

India VIX remained largely unchanged, slipping marginally by 0.04 percent to close at 11.78. Despite persistent global uncertainties, volatility remains muted, suggesting an expectation of consolidation rather than sharp corrections. This subdued volatility underscores cautious optimism among market participants without signs of elevated fear.

The Put-Call Ratio (PCR) has improved from 1.11 to 1.34, reflecting the strengthening dominance of put writers and the prevailing bullish sentiment.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.