With FPIs holding steadfast to heavy short positions and volatility elevated, rallies could easily turn into bull traps. The technical structure continues to support a “sell-on-rise” strategy, with the possibility of Nifty testing 24,200–24,100 in the near term.
Current options data and the Put-Call Ratio (PCR) suggest that the market is likely to remain in a short-term consolidation phase, said Sudeep Shah of SBI Securities.
Slow markets are prone to slower moves and that may not even reach the target in a hurry. With Collor, Put can be moved upwards in case the Future move close to target but does not hit the target.
FII futures positioning still shows a heavy concentration of shorts around. Until this data turns more constructive or prices start to form a consistent pattern of higher highs and higher lows, the Nifty 50 is likely to remain anchored near the lower end of the Bollinger Bands, Rahul Sharma of JM Financial said.
Weekly options data suggests that the broader trading range for the Nifty 50 is expected to remain between 24,000 and 25,000, with the immediate range seen at 24,500–24,800.
The Nifty 50 must defend its Tuesday’s low (24,465, which is the key support) in the upcoming session, for further upward movement toward 24,700, followed by 24,800. Sustaining above these levels could open the door for a strong rally, experts said.
Range-bound trading is likely to be seen in the market in the upcoming sessions. Below are some short-term trading ideas to consider.
As long as the Nifty 50 holds these support levels (24,589 and 24,465), the upward journey toward the 24,700 (immediate hurdle) and then 24,800–24,850 (a crucial hurdle) remains possible in the upcoming sessions, according to experts.
Weekly options data suggest that the Nifty 50 is expected to trade in the 24,500–24,800 range in the upcoming sessions.
In the upcoming session, if the Nifty 50 rebounds, the 24,600 (10-day EMA) and 24,700 (previous day’s high) are likely hurdles. However, on the lower side, the 24,350 level can act as support.
The 24,700 is expected to be the immediate hurdle for the Nifty 50, followed by 24,850 (near the 50-day EMA) as the crucial hurdle to decide the further uptrend. Until these levels are decisively broken and sustained, the consolidation may continue, with key support at 24,300, according to experts.
The Nifty 50 is expected to consolidate until it decisively breaks the previous week's range on either side for a firm direction. Below are some short-term trading ideas to consider.
The weekly options data suggested that the Nifty 50 is expected to trade within a broad range of 24,000–25,000, with an immediate range of 24,400–24,700.
Short term indicators are showing positive divergence suggesting lack of downside momentum but positive price action awaited in the Nifty 50, said Ashish Kyal of Waves Strategy Advisors.
The Nifty 50 needs to clear and sustain above the 24,700–24,750 zone to confirm a northward journey. Until then, consolidation may continue with support around the 24,350 zone.
The market may remain consolidative and rangebound until it gives a strong close above all key moving averages. Below are some short-term trading ideas to consider.
If the Nifty 50 extends gains up to 24,650 (the immediate hurdle) and marches toward the crucial resistance zone of 24,800–24,850 — and sustains there — a major upmove cannot be ruled out. However, failure to do so could lead to continued consolidation, with support at 24,330, followed by 24,200 (the 200-day EMA), according to experts.
Overall, the sentiment remains favourable for bears, but considering the RSI Smoothened is near oversold levels, a rebound can't be ruled out. The Nifty 50 may face resistance at 24,500–24,600 in case of a rebound.
If the Nifty 50 breaks below the 200-day EMA (24,200) in the upcoming sessions, the 50-week EMA (24,000) could be the next possible level. On the higher side, however, the 24,500 mark is likely to act as a resistance, according to experts.
The market may attempt a bounce back after six weeks of consistent losses, but sustainability will be the key to watch. Below are some short-term trading ideas to consider.
Butterfly is a strategy that involves selling of 2 options close to the current market price of the stock or index and buying a higher strike price option and buying a lower strike price option.
Chart formation signals a lack of conviction among bulls and a clear dominance of bears at higher levels, said Sudeep Shah of SBI Securities.
With short positions on the rise and FPIs doubling down on bearish bets, volatility could remain elevated. While oversold readings may spark brief recoveries, structural weakness suggests such rallies may turn into bull traps.
Weekly options data suggest that the Nifty 50 is likely to take support around 24,300, with further downside toward 24,000–23,800 not being ruled out. On the upside, 24,500 remains the key resistance to watch.
As long as the Nifty 50 holds the 24,500–24,400 levels (support) on a closing basis, a gradual move toward 24,700–24,900 cannot be ruled out. However, a break of the support can again strengthen the bears.