Below is a professional analysis of the probable movement and critical levels for the Nifty 50 index based on the basis of open interest (OI) data, futures, options, and FII/DII activity. The analysis integrates market sentiment, technical levels, and derivative positioning to forecast near-term price action as of July 25, 2025.
Analysis of Nifty 50 Probable Movement and Critical Levels
1. Open Interest and Futures Data Analysis
The provided data shows participant-wise open interest and daily trends in futures and options for the Nifty 50 index, along with FII, DII, and proprietary (Pro) positioning. Key observations:
FII Activity:
FIIs hold a net short position in futures index contracts (-158,520 contracts) and a significant net short position in index options (-262,313 contracts) as of July 25, 2025.
Daily futures variation shows FIIs reducing short positions slightly (-7,663 contracts), but the cumulative short bias remains strong, indicating bearish sentiment.
FIIs’ net selling in the cash market (-₹1,995.5 crore) reinforces their cautious-to-bearish outlook.
DII Activity:
DIIs maintain a net long position in futures (+24,677 contracts), acting as a counterforce to FII selling. This suggests domestic institutions are absorbing selling pressure, supporting the index at lower levels.
However, their relatively smaller position size compared to FIIs limits their ability to drive significant bullish momentum.
Proprietary Traders (Pro):
Pros hold a net long position in futures (+17,396 contracts) but a net short position in options (-265,739 contracts). This mixed positioning indicates Pros may be hedging or betting on range-bound movement with a bearish tilt in options.
Cumulative OI Trends:
The cumulative futures index net OI has grown increasingly negative (-116,447 contracts), reflecting sustained bearish positioning by FIIs over the period.
Option index net OI is also heavily negative (-528,052 contracts), with a significant increase in put writing, suggesting expectations of downside protection or consolidation.
2. Option Chain Insights
Option OI Distribution:
The option index data shows higher put OI (3,036,165 contracts) compared to call OI (4,280,581 contracts), with Pros and FIIs heavily short on calls and puts. This indicates a market expecting limited upside in the near term, with put writers defending lower levels.
Key strike levels with high OI (not explicitly provided but inferred):
Support: Likely concentrated at 24,500–24,700, where put OI is typically heavy, acting as a strong demand zone.
Resistance: Likely at 25,000–25,200, where call OI is significant, capping upward moves.
Put-Call Ratio (PCR):
The PCR (put OI ÷ call OI) is approximately 0.71 (3,036,165 ÷ 4,280,581), signaling bearish sentiment as put writing dominates. A PCR below 1 typically indicates caution or bearishness.
3. Price Action and Technical Levels
Nifty 50 Closing Price: The index closed at 24,837 on July 25, 2025, down from its recent high of 25,637.8 on June 27, 2025, reflecting a correction of ~3.1%.
Trend Analysis:
The Nifty 50 has been in a consolidation phase, with a downward bias over the last month, as evidenced by lower highs and lower lows (e.g., 25,637 on June 27 to 24,837 on July 25).
The index is trading below its 20-day moving average (~25,100) and approaching the 50-day moving average (~24,700), a critical support level.
Key Levels:
Support:
24,700: Coincides with the 50-day moving average and high put OI, making it a strong demand zone.
24,500: A psychological level with potential for increased put buying if breached.
Resistance:
25,000: A psychological and technical resistance with significant call OI.
25,200: Likely to see heavy selling pressure due to FII short positions and call writing.
4. Global Market Context
US Indices:
The NASDAQ Composite (19,662.49), Dow Jones (42,967.62), and S&P 500 (6,045.26) on June 12, 2025, indicate a mixed global sentiment. The NASDAQ and S&P 500 have shown resilience, while the Dow has been range-bound.
A stronger US market could provide some support to global risk sentiment, but FII outflows from India (-$231.15 million net equity investment) suggest capital is rotating away from emerging markets like India.
Nifty Bank Index:
The Nifty Bank index closed at 56,528.9, also in a corrective phase from its high of 57,443.9 on June 27, 2025. Its movement often correlates with the Nifty 50, reinforcing the broader market’s cautious outlook.
5. Probable Movement
Based on the OI data, FII/DII positioning, and technical levels, the Nifty 50 is likely to exhibit the following behavior in the near term (next 1–2 weeks):
Bearish Bias with Consolidation:
FIIs’ heavy short positions in futures and options, combined with net selling in the cash market, suggest continued downward pressure. The index may test the 24,700–24,500 support zone, where DII buying and put writing could stabilize prices.
A break below 24,500 could trigger further selling toward 24,200–24,300, especially if global risk-off sentiment intensifies.
Range-Bound Scenario:
If the 24,700 support holds, the index could consolidate between 24,700 and 25,000, with volatility driven by option expiry dynamics and FII unwinding of short positions.
A breakout above 25,000 would require significant DII buying or a reversal in FII sentiment, which seems unlikely given current data.
Upside Capped:
Resistance at 25,000–25,200 is likely to hold due to heavy call OI and FII short positions. A sustained move above 25,200 would require strong global cues or a shift in FII positioning to net long.
6. Critical Levels to Watch
Immediate Support: 24,700 (50-DMA, high put OI)
Strong Support: 24,500 (psychological, demand zone)
Immediate Resistance: 25,000 (psychological, high call OI)
Strong Resistance: 25,200 (technical resistance, FII short pressure)
Breakout Trigger:
Above 25,200: Bullish momentum toward 25,500–25,600.
Below 24,500: Bearish breakdown toward 24,200–24,300.
7. Recommendations
Traders:
Short-Term: Consider bearish strategies (e.g., put buying or call writing) near 25,000, with a stop-loss above 25,200. Alternatively, buy puts at 24,700 for downside protection.
Hedging: Use 24,500 puts and 25,000 calls for a range-bound strategy.
Investors:
Accumulate quality stocks on dips near 24,500–24,700, as DII buying may provide support. Avoid aggressive long positions until FII selling subsides.
Monitor:
FII activity for signs of short covering.
Global cues, especially US indices and FII flows.
Option OI shifts ahead of the weekly/monthly expiry.
8. Conclusion
The Nifty 50 is likely to remain under pressure with a bearish bias, driven by FII short positions and net selling in the cash market. The 24,700–24,500 range is a critical support zone, supported by DII buying and put OI, while 25,000–25,200 acts as a strong resistance. Traders should prepare for volatility within this range, with a potential downside test if global or domestic sentiment worsens. A breakout above 25,200 or below 24,500 will define the next directional move.
Disclaimer: This analysis is based on the provided data and general market principles. It is not financial advice. Consult a certified financial advisor before making investment decisions.
Sources:
National Stock Exchange (NSE) data
Central Depository Services (India) Limited (CDSL) FII/FPI data
Anish Parashar
Indirect tax india research
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