Dancing December ahead for Nifty, 27,000 emerging as the next major milestone

Nifty Outlook for December

Encouraging Q2 GDP numbers have set a compelling stage for the Reserve Bank of India (RBI) to go for drastic rate cut going ahead. In this backdrop and based on its recent performance, the Nifty is set to dance and move ahead to newer heights in December 2025.

Nifty 50 index wrapped up November on a resilient note, printing a bullish monthly candle and closing at 26,202, slightly above its previous monthly peak of 26,104, signalling persistent strength in the ongoing upward trajectory. The index gained 480 points during the month while navigating a wide 992-point range, bottoming out at 25,318 and registering a fresh high of 26,310. With Nifty extending deeper into uncharted territory, the broader sentiment for December remains constructive, underpinned by firm momentum across higher timeframes.

The monthly RSI at 67, rebounding decisively from the vital 60 zone, indicates strong underlying bullish intent, while the weekly chart continues to reflect healthy trend strength with the index sustaining above the 10-week EMA placed at 25,700. The continued higher high–higher low structure further reinforces the medium-term positive bias. Although Nifty climbed to a new all-time high (ATH) of 26,310 in the final week of November, it fell marginally short of closing above the previous ATH of 26,277; however, as long as the index holds above 25,700, sentiment remains firmly tilted in favour of the bulls. A convincing weekly close above 26,490 could open the pathway toward the next major resistance at 27,000.

On the daily timeframe, Nifty has formed an inside-bar pattern between 26,310 and 26,141, reflecting a brief phase of consolidation before a likely expansion in volatility. A breakout on either side of this range is expected to trigger a sharp directional move. Meanwhile, the daily RSI is exhibiting triple bearish divergence, hinting at the possibility of a short-lived retest or a mild pullback. Immediate support cushions are placed at 26,010 and 25,700—zones likely to attract dip-buying interest.

Overall, the broader outlook remains robust, with sustained higher-timeframe momentum and clearly defined support clusters providing stability. While minor corrective phases may emerge due to momentum divergences, such retracements are likely to be utilised as accumulation opportunities as long as key supports remain intact.

Options Market Radar

Options landscape indicates a mildly optimistic tone, with Put writers showcasing strength at critical in-the-money strikes. On the upside, heavy Call writing at 26,400 and 26,500 has formed a strong supply cap, whereas aggressive Put writing around 26,100 reinforces a solid support floor—establishing 26,000 as a critical pivot zone.

The overall structure remains binary: a decisive breakout above 26,500 may unleash swift short covering, propelling the index toward 27,000–27,300. Conversely, dips toward 26,000–25,700 are expected to see renewed accumulation, while a sustained close below 25,700 would shift the tone toward caution, signalling emerging weakness in the prevailing trend.

FPI Flows – Shorts at Multi-Year Extremes

Foreign Portfolio Investors remained net sellers in the cash segment for the fifth straight series, though a meaningful portion of their short exposure in index futures was unwound during November. This phase of short covering played a key role in absorbing downside pressure, even as FPIs remained hesitant to initiate aggressive long positions. Their net short positions eased significantly to 87,596 contracts from 1,25,000 in the previous series, highlighting a considerable reduction in bearish bets and lending incremental support to market sentiment.

Final Outlook

With strong higher-timeframe momentum, resilient support zones, easing FPI shorts, and options positioning favouring a bullish undertone, Nifty enters December on a firmly positive footing. While brief pullbacks may surface due to daily divergence, the structural trend remains upward. As long as the index sustains above the 25,700–26,000 band, Nifty remains poised to scale fresh all-time highs, with 27,000 emerging as the next major milestone in its ongoing rally.