Sensex, Nifty may snap their 6-day rally; key levels to track on August 22

The Put-Call Ratio (PCR) has eased slightly from 1.34 to 1.01, yet continues to reflect the dominance of put writers and a bullish-to-sideways sentiment in the market.

After six straight sessions of gains, Nifty and Sensex look set for a breather as early cues point to profit-taking. At 8:10 am, the Gift Nifty slipped 80 points, or 0.32 percent, to 25,041, hinting at a softer start for Dalal Street on Friday, August 22.

Indices gained on Thursday, lifted by pharma, oil & gas and banking stocks. The midcap and smallcap index, however, broke their three-day rally to end lower, while weakness in autos, FMCG and PSU banks also capped the upside.

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Foreign investors (FIIs/FPIs) pumped Rs 1,247 crore into Indian equities on Thursday, August 21. At the same time, domestic institutional investors (DIIs) sustained their support with net purchases of Rs 2,546 crore, according to provisional exchange data.

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

Nifty’s broader structure remains constructive, with higher lows indicating persistent buying interest. The near-equal positioning of both call and put writers highlights the possibility of a consolidation phase, but a sustained move above 25,150 could unlock the next leg higher towards 25,250, likely forcing call writers into short covering. Support zones have shifted higher, with 24,850–25,000 now emerging as the key demand area. Firm positioning by put writers at lower strikes further strengthens the positive outlook. Unless the index decisively breaches 24,850, bulls are expected to hold the upper hand. For now, a “buy-on-dips” strategy remains the most prudent approach, with traders watching closely for a breakout above 25,150 to confirm the next leg of upside momentum.

“Nifty Bank index continues to struggle for strong directional momentum, with leading banking heavyweights yet to exhibit sustained strength. The immediate hurdle lies in the 55,800–56,000 zone, and only a decisive breakout above this band could unleash bullish momentum, powered by short covering. On the downside, dips toward 55,500 remain attractive accumulation opportunities, supported by firm put writing at lower strikes” Dhupesh Dhameja of SAMCO Securities said. “However, a breach below 55,450 would be an early sign of weakness, opening the doors for a slide toward the 55,000 mark. Until then, sideways movement is expected to dominate”, he added.

India VIX slipped 3.50 percent to settle at 11.37. Despite lingering global uncertainties, volatility remains subdued, hinting at a consolidation phase rather than sharp corrections. The muted VIX reading underscores cautious optimism among market participants, with no signs of heightened fear.

The Put-Call Ratio (PCR) has eased slightly from 1.34 to 1.01, yet continues to reflect the dominance of put writers and a bullish-to-sideways sentiment in the market.