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Nifty Struggles at 24800: What Options Data Tells Us About Market Direction

 

Nifty settled at 24,578, down by 1.39% on Tuesday. The index failed to attract follow-up buying above 24,800, which acted as a strong resistance zone (as highlighted in our previous write-up dated May 2, 2025). It eventually closed well below this level, indicating the presence of selling interest near key resistance.

Technical Overview:
Nifty successfully tested the resistance zone of 24,800 and subsequently formed a bearish Harami pattern on the daily chart. This pattern coincides with a recent swing top and occurred near a resistance zone, thereby strengthening its technical significance.

A large trading range was observed on Monday, May 12, 2025, which suggests the possibility of a sideways move in the coming sessions.

Despite the recent pullback, the intermediate trend remains bullish as the price is still holding above the 9 and 21 DEMA levels. Moreover, the 9 DEMA is placed above the 21 DEMA, confirming the uptrend. Key support is now seen in the 24,100–24,000 zone.

  • Immediate support is placed at 24,550, followed by 24,350.

  • A retest of the 24,500 area cannot be ruled out.

  • A sustained move below 24,350 could disrupt the current structure and open the possibility of a gap-fill towards 24,000.

  • The key structural support remains intact at 23,700, as mentioned earlier.

  • Resistance continues at 24,800. A decisive move above this could lead to a test of the 25,100–25,220 zone.

  • The next resistance is located at 25,250.

Derivatives Data Insights:

  • Weekly Options Data:

    • Around 64.6 lakh contracts were added at the 25,000 CE strike, with decent additions also seen at 24,800 CE, 24,700 CE, and 24,600 CE — indicating a strong resistance at 25,000.

    • On the put side, short covering was observed at 24,800–24,700 PE strikes along with 24,500 PE, indicating nervousness around 24,500.

    • However, OI addition at the 24,200 PE strike suggests potential support and a trading range of 24,200–24,800.

  • Monthly Options Data:

    • The 24,500 strike continues to be a critical level, with mixed behavior in open interest on both calls and puts.

    • Heavy OI addition at the 25,000 CE strike indicates strong resistance.

    • Short covering at 24,500 PE suggests weakness in support, increasing the probability of a breach.

    • OI buildup on 24,000 PE hints at a broad trading range between 24,000–25,000 for the rest of the month.

Conclusion:
Given the technical structure and derivatives data, Nifty is likely to consolidate around the 24,500 zone in the near term. A fresh major uptrend will be confirmed only with sustained stability above 24,800. Until then, the index is expected to remain in a range-bound mode between 24,200–24,800.

Plan your trades accordingly, keeping these levels in focus.

Comments

Harry Potter said…
Nifty Moved in upside and negated the the view
May 15, 2025 at 7:52 PM
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