The Indian equity market continued its downward trajectory for the 10th consecutive day on March 4, 2025, with the Nifty 50 closing at 22,083, marking a fresh 9-month low.
Despite the persistent bearish trend, a late recovery from the day's lows offered a glimmer of hope, though sentiment remains tilted in favor of bears. The Bank Nifty, closing at 48,245, outperformed the broader index with a 131-point gain, reflecting relative resilience. Below is a professional analysis of the market outlook, probable movements, and key support/resistance levels for both indices based on the provided technical and options data.
Nifty 50: Market Insights and Probable Movements
The Nifty 50 exhibited a lower tops-lower bottoms formation, signaling persistent weakness in the short term. However, the index formed a bullish candle on the daily chart, with the close higher than the opening, hinting at potential buying interest at lower levels.
Momentum indicators reinforce the bearish bias:
RSI at 21.79 is in the oversold zone, suggesting a possible bounce but also extreme weakness.
MACD remains below the zero line, indicating sustained downward momentum.
Options data provides further clarity:Call Open Interest (OI): Maximum OI is concentrated at 22,500 (1.21 crore contracts), making it a formidable resistance.
Significant Call writing at 22,200 (+30.36 lakh contracts) suggests sellers are defending this level.
Put Open Interest (OI): Maximum OI is at 21,500 (93.65 lakh contracts), followed by 22,000 (84 lakh contracts), indicating strong support zones.
Put-Call Ratio (PCR): The PCR rose to 0.86 from 0.81, reflecting a slight increase in Put buying. While still below 1, this suggests cautious optimism among traders, though bearish sentiment prevails.
Probable Movement: The Nifty 50 is expected to trade within a broad range of 21,800-22,200 in the near term. A rebound could face resistance at 22,250-22,300, with a break above this potentially targeting 22,500. Conversely, a breach of the critical support at 22,000 could accelerate declines toward 21,900-21,800, aligning with Fibonacci and pivot support levels.
Key Levels:
Resistance: 22,104 (pivot), 22,138 (pivot), 22,191 (pivot), 22,250-22,300 (technical), 22,500 (options).
Support: 21,997 (pivot), 21,964 (pivot), 21,910 (pivot), 21,900-21,800 (technical), 21,500 (options).
Bank Nifty: Market Insights and Probable Movements
The Bank Nifty showed relative strength, rebounding from the lower Bollinger Band and closing 131 points higher at 48,245. A bullish candlestick with a minor upper shadow indicates buying interest, though pressure at higher levels persists.
Momentum indicators present a mixed picture:
RSI is trending upward but remains in the lower band, suggesting tentative bullishness.
MACD below the zero line reflects ongoing weakness in the broader trend.
Options data highlights key levels:
Call Open Interest (OI): Maximum OI is at 50,000 (12.91 lakh contracts), a significant resistance, followed by 49,000 (11.28 lakh contracts). Call writing at 50,000 (+85,500 contracts) reinforces this ceiling.
Put Open Interest (OI): Maximum OI is at 48,000 (10.77 lakh contracts), followed by 47,000 (7.89 lakh contracts), indicating robust support zones.
Probable Movement: The Bank Nifty is likely to oscillate between 47,732 and 48,632 in the short term. A sustained move above 48,460 could trigger a rally toward 49,000 or even 50,000, contingent on broader market cues. On the downside, a break below 48,000 may push the index toward 47,865 (Fibonacci support) or 47,732 (pivot support).
Key Levels:
Resistance: 48,354 (pivot), 48,460 (pivot), 48,632 (pivot), 49,411 (Fibonacci), 50,000 (options).Support: 48,010 (pivot), 47,903 (pivot), 47,732 (pivot), 47,865 (Fibonacci), 47,000 (options).
Broader Market Observations
India VIX: At 13.83 (up 0.49%), volatility remains subdued and favorable for bulls, though a sustained rise above 14 could signal increased uncertainty.
.F&O Ban: Manappuram Finance’s inclusion in the ban list reflects speculative pressures in specific segments.
Trading Strategy
Nifty 50:
Bullish Bet: Buy on dips near 22,000-21,964, targeting 22,250-22,300, with a stop below 21,910.
Bearish Bet: Short below 22,000, targeting 21,900-21,800, with a stop above 22,104.
Bank Nifty:
Bullish Bet: Buy near 48,000-47,903, targeting 48,632-49,000, with a stop below 47,732.
Bearish Bet: Short below 48,000, targeting 47,865-47,732, with a stop above 48,354.
Conclusion
The Nifty 50 remains under pressure, with bears holding the upper hand unless 22,250-22,300 is reclaimed. The Bank Nifty, while showing resilience, faces a critical test at 48,000. Traders should monitor these pivotal levels closely, leveraging options data and momentum indicators to navigate the range-bound market effectively. Caution is advised given the oversold conditions and potential for sharp reversals.
Anish Jagdish Parashar
Indirect tax india research
Disclaimer: Content above reflect personal views of the author and for trading and investment purpose consult your financial advisor:
.jpeg)