Nifty 50 Probable Movement

 

Nifty 50 Probable Movement & Critical Levels - 14th August 2025

1. Market Summary

• Latest Nifty 50 Close: 24,619
• Short-term bias: Bearish, based on FII net short positions in index futures and options.
• FII Cash Activity: Predominantly selling over the last few sessions.
• DII Cash Activity: Mostly buying support observed.
• Proprietary Participants: Mixed activity with slight net selling.
• Global cues: NASDAQ, Dow Jones, and S&P 500 show moderate risk-off sentiment.

2. Open Interest & Futures/Options Analysis

• FII Index Futures Net: Short positions remain high, indicating bearish bias.
• FII Index Options Net: Large open interest in put options suggesting hedging or anticipation of downside.
• Daily Variation in Futures/Options: Potential short covering if index rises sharply, creating temporary volatility.

3. Key Levels for Nifty 50 (Updated)

• Immediate Resistance: 24,750 - 24,800
• Support Levels: 24,450 - 24,500
• Critical Support: 24,300 - 24,35

4. Probable Market Scenario

• Bearish bias likely to continue in near term unless FII short covering occurs.
• DII support may create small upside rallies but will face resistance around 24,750 - 24,800.
• Watch high OI option strikes for potential short squeezes or volatility spikes.

Analysis 

1. Introduction

The Nifty 50, a benchmark index of the Indian stock market, is influenced by institutional positioning, market sentiment, and global cues. Open interest data provides insights into the positioning of key market participants—Foreign Institutional Investors (FIIs), Domestic Institutional Investors (DIIs), and proprietary traders (Pro)—which can signal potential price movements. This paper leverages the provided OI data, index closing prices, and global indices to predict Nifty 50's trajectory and identify critical levels.

2. Data Analysis

The dataset spans from May 22, 2025, to August 13, 2025, and includes:

Futures and Options OI: Net positions of FIIs, DIIs, and Pro traders.

Index Closing Prices: Nifty 50, Nifty Bank, NASDAQ Composite, Dow Jones, and S&P 500.

Daily Variations: Changes in futures and options OI.

2.1 Futures Open Interest

FIIs: Consistently net short in futures, with a cumulative net position of -182,757 contracts on August 13, 2025. Their short positions increased steadily, indicating bearish sentiment.

DIIs: Net long with 37,475 contracts, acting as a counterbalance to FII selling but with significantly lower volume.

Pro Traders: Marginally net long at 19,103 contracts, showing neutral to slightly bullish positioning.

Trend: The cumulative futures OI remained negative (-126,179 contracts), reflecting bearish dominance, particularly from FIIs.

2.2 Options Open Interest

FIIs: Net short in options (-242,369 contracts), with higher put writing (562,039 put long vs. 371,415 put short) compared to calls, suggesting hedging or bearish bets.

Pro Traders: Net short in options (-141,221 contracts), with balanced call and put writing, indicating a neutral to bearish stance.

DIIs: Minimal options activity, with 33,439 put long contracts and no call activity, reflecting limited participation.

Key Levels: High OI concentrations in calls at 25,000 and 25,500 strikes and puts at 24,500 and 24,000 strikes (inferred from market context) suggest these as resistance and support levels, respectively.

2.3 Price Movement

Nifty 50 Closing Price: On August 13, 2025, the Nifty 50 closed at 24,619.35, down from a peak of 25,637.8 on June 27, 2025, reflecting a corrective phase.

Nifty Bank: Closed at 55,181.45, also trending lower from 57,443.9 on June 27, 2025.

Global Indices: NASDAQ, Dow Jones, and S&P 500 showed mixed performance, with NASDAQ recovering to 21,681.9 by August 12, 2025, indicating global market volatility.

2.4 Daily Variations

Futures: FIIs reduced short positions slightly on August 13 (from -185,258 to -182,757), while DIIs maintained steady long positions.

Options: Significant put writing by FIIs and Pro traders on August 13 suggests accumulation at lower levels, potentially capping downside.

3. Probable Movement

Based on the OI data and price trends:

Bearish Bias: FIIs’ heavy short positions in futures and options indicate continued selling pressure. The negative cumulative OI (-383,590 in options, -126,179 in futures) supports a bearish outlook.

Support Levels: High put OI at 24,500 and 24,000 strikes suggests strong support around these levels. The recent low of 24,487.4 (August 12, 2025) reinforces 24,500 as a key support.

Resistance Levels: Call OI at 25,000 and 25,500 strikes indicates resistance. The index’s failure to sustain above 25,000 (last seen on July 1, 2025) confirms this as a near-term ceiling.

Short-Term Outlook: The Nifty 50 is likely to consolidate between 24,500 (support) and 25,000 (resistance) in the near term. A break below 24,500 could lead to a decline toward 24,000, while a sustained move above 25,000 may signal a reversal toward 25,500.

4. Critical Levels

Support:

24,500: High put OI and recent price action suggest strong buying interest.

24,000: Psychological level with significant put writing.

Resistance:

25,000: Heavy call OI and recent rejection point.

25,500: Next resistance based on OI buildup and historical highs.

Pivot: The current closing price of 24,619.35 places the index near a critical pivot. A move above 24,750 (20-day moving average, inferred) could signal bullish momentum, while a drop below 24,500 may accelerate selling.

5. Global Context

NASDAQ and S&P 500: Recovery in US indices (NASDAQ at 21,681.9, S&P 500 at 6,445.76 on August 12, 2025) may provide mild positive cues, but volatility persists.

Correlation: The Nifty 50’s correlation with global indices suggests that a sustained US market rally could support a bounce, while a downturn may exacerbate FII selling.

6. Conclusion

The Nifty 50 is in a corrective phase with a bearish bias driven by FII selling in futures and options. Key support lies at 24,500 and 24,000, with resistance at 25,000 and 25,500. Traders should monitor OI changes at these strikes and global market trends for directional cues. A break below 24,500 could trigger further downside, while a move above 25,000 may indicate a short-term reversal.

7. Recommendations

Bulls: Consider call options above 24,750 with a target of 25,000, using 24,500 as a stop-loss.

Bears: Initiate put options below 24,500, targeting 24,000, with a stop-loss above 24,750.

Hedgers: Use a straddle at 24,500 to capitalize on potential volatility.

Disclaimer

This report is for informational purposes only and does not constitute financial advice. Trade with caution.

Anish Jagdish Parashar 

Indirect tax india online research