Sensex, Nifty set for upbeat open on US-Japan trade deal; key levels to watch on July 23

This persistently low volatility environment indicates that while bears are active during intraday pullbacks, there is no sign of panic or aggressive unwinding.

Benchmark indices Nifty and Sensex are set for a positive start on July 23, tracking upbeat global cues after the US and Japan sealed a trade deal, raising hopes of further agreements—possibly between the US and India. At 7:40 am, Gift Nifty traded 76 points higher at 25,160.

Markets have been trading within a range amid trade tariff worries and a slightly sluggish start to first quarter earnings. On Tuesday, all sectoral indices traded in a sea of red. Fear and nervousness in the markets continue to subside, as indicated by the India VIX index, which fell 3.5 per cent to 10.82.

Foreign portfolio investors (FPIs) were net sellers of Rs 3,548 crore worth of shares in Indian equities on July 22, while domestic institutional investors (DIIs) net bought Rs 5,239 crore worth of shares, the highest since June 16, according to provisional NSE data.

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

As long as the index holds above 24,800, scope for supportive buying on dips remains intact. A decisive close above 25,250 is essential to negate the prevailing bearish undertone and revive bullish sentiment. Relative Strength Index (RSI) continues to hover below the neutral 50 mark, confirming the lack of positive momentum and reinforcing the current cautious market tone. Until a directional breakout occurs on either side, the index is likely to remain trapped in a low-volatility, range-bound environment.

"The Nifty Bank index has established a strong foothold near the 0.50 percent Fibonacci retracement level, currently placed at 56,400, which serves as a crucial support and last line of defence for the bulls. This reinforces the significance of the 56,500–56,400 area in determining the next directional leg for the index," Dhupesh Dhameja of SAMCO Securities said. "Despite multiple attempts, the index has been struggling to clear its swing resistance zone, which remains heavy near the 57,300 mark, highlighting sustained supply pressure from higher levels. The structure remains broadly neutral-to-weak, and as long as the index holds above 56,400, buyers may attempt to defend key support. However, a decisive breakout above 57,350 is essential to negate the bearish bias and reignite upward momentum," he added.

The Put-Call Ratio (PCR) slipped from 0.86 to 0.70, indicating a pickup in call writing and suggesting a tilt towards bearish positioning. The tug-of-war between call and put writers near key strikes underlines the ongoing uncertainty in the market

India VIX dropped sharply by 4.02 percent, closing at 10.75, remaining well below the crucial 13-mark. This persistently low volatility environment indicates that while bears are active during intraday pullbacks, there is no sign of panic or aggressive unwinding. The overall price action continues to reflect a disciplined consolidation phase, rather than a deep correction or trend reversal.