Market Overview: Nifty 50 and Bank Nifty Performance
On May 28, 2025, the Nifty 50 index closed at 24,752, down by approximately 0.33% (85 points), marking its second consecutive session of losses. The index remained range bound, trading between 24,500 and 25,100, with consolidation expected to continue until a decisive breakout occurs. The Bank Nifty, closing at 55,417, showed resilience, gaining 64 points and forming a small bullish candle, supported by key moving averages and a positive RSI crossover at 59.06.Key Technical Insights
The Nifty 50 formed a bearish candle with a lower highs-lower lows pattern, closing below the 10-day EMA. The RSI at 56.05 tilted downward, signaling weakening momentum, while the MACD showed a negative crossover despite remaining above the zero line. Pivot levels indicate resistance at 24,833, 24,863, and 24,912, with support at 24,736, 24,706, and 24,657. For Bank Nifty, resistance lies at 55,501, 55,568, and 55,678, with support at 55,282, 55,215, and 55,105. Fibonacci retracement levels suggest potential upside resistance at 56,307 and 58,648, with support at 54,117 and 52,892.F&O Expiry Impact and Options Data
The monthly F&O expiry on May 29, 2025, is likely to drive volatility. Nifty options data highlights significant Call open interest at the 25,500 strike (1.28 crore contracts) and Put open interest at the 24,000 strike (1.15 crore contracts), indicating resistance at 25,500 and support at 24,000. Heavy Call writing at 25,500 (30.31 lakh contracts added) and Put writing at 24,750 (24.2 lakh contracts added) suggest bears are defending higher levels. The Put-Call Ratio (PCR) dropped to 0.76 from 0.82, reflecting cautious sentiment as Call selling outpaces Put selling. For Bank Nifty, maximum Call open interest at 57,000 and Put open interest at 55,000 reinforce a range bound outlook, with resistance at 57,000 and support at 55,000.Institutional Activity: FII and DII Trends
Foreign Institutional Investors (FIIs) were net sellers in the cash segment on May 28, offloading ₹78,987 crore, while Domestic Institutional Investors (DIIs) were net buyers at ₹12,475 crore. In the derivatives segment, FIIs showed a bearish stance, with cumulative net selling of ₹48,789 crore, contrasting with proprietary traders' net buying of ₹8,487 crore. This divergence suggests FIIs are unwinding long positions or building shorts, potentially capping upside momentum. Over the past week, FIIs consistently sold in the cash segment, with cumulative net sales of ₹72,443 crore, while DIIs provided support with net purchases.India VIX and Market Sentiment
The India VIX, a gauge of market volatility, fell 2.79% to 18.02 but remains elevated, signaling caution among investors. This level suggests Nifty bulls face challenges, particularly with the F&O expiry looming. The high trading volume on May 28, the highest since November 25, 2024, indicates active participation but also profit-taking, especially in large-cap stocks.Market Dynamics and Sectoral Trends
Sectoral performance was mixed, with Nifty IT leading declines, while Realty and Pharma posted modest gains. The broader market saw Nifty SmallCap edge up 0.13%, while MidCap dipped 0.10%. Stocks like Jio Financial (+3.43%), IndusInd Bank (+2.57%), and Sun Pharma (+0.44%) cushioned the Nifty’s fall, while heavyweights such as ICICI Bank (-1.06%), Axis Bank (-1.72%), and ITC (-2.29%) dragged the index lower. A long build-up was observed in 39 stocks, while 72 stocks saw a short build-up, reflecting mixed positioning.Global and Domestic Influences
Global cues were weak, with most Asian markets declining amid geopolitical tensions and anticipation of the US FOMC minutes release on May 28, 2025, at 11:30 PM IST. A hawkish tone could pressure equities further, while a dovish stance might lift sentiment. Domestically, the early monsoon onset and RBI’s dividend provided limited support, overshadowed by FII outflows and profit-booking in rate-sensitive sectors.Trading Strategy for May 29, 2025Nifty 50: A break below 24,700 could trigger a slide toward 24,500–24,450, while a close above 24,850 may push the index toward 25,116. Traders should monitor the 24,000 Put and 25,500 Call levels for expiry-related moves. A buy-on-dip strategy near support levels could be effective if bullish momentum resumes.Bank Nifty: The index’s bullish candle and RSI crossover suggest potential for an upside move toward 55,678 or higher. Support at 55,000 remains critical. Traders can consider long positions on dips near support, with a stop-loss below 55,105.F&O Expiry: Expect heightened volatility due to the monthly expiry. Focus on high open interest strikes (24,000 Put, 25,500 Call for Nifty; 55,000 Put, 57,000 Call for Bank Nifty) for potential breakout or breakdown trades.Risk Management: Given the elevated India VIX and FII selling, maintain strict stop-losses and avoid over-leveraged positions. Monitor FII/DII flows and global cues, particularly the FOMC minutes, for directional triggers.
Conclusion
The Nifty 50’s consolidation within the 24,500–25,100 range, coupled with FII selling and a cautious India VIX, points to a market at a crossroads. The upcoming F&O expiry and global developments, including the US FOMC minutes, will likely dictate the next move. Traders should stay nimble, focusing on key support and resistance levels while leveraging options data for precise entries and exits. Bank Nifty’s relative strength offers opportunities for selective bullish trades, but risk management remains paramount in this volatile environment.
Anish Jagdish Parashar
Indirect tax india research
Disclaimer: Content above reflect personal views of the author and for trading and investment decisions consult your financial advisor.
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