Nifty 50 probable movement on 25.8.25
Based on the open interest (OI) data, historical trends, participant net positions, and related market indicators (including US indices for global cues), here's an analysis of the probable movement for Nifty 50. The assessment focuses on the next trading session (August 25, 2025, assuming markets are closed over the weekend). Key insights are derived from FII dominance in positioning, changes in net OI, PCR implications, correlations between net positions and price movements, and recent price action.
Key Observations from the Data
Current Participant Positions (as on August 22, 2025):
FIIs are heavily net short in index futures (-171,509 contracts) and bearish in index options (net -353,961, indicating more net puts than net calls, suggesting expectation of downside or hedging against falls).
DIIs are net long in futures (+28,985), providing some counterbalance, but their scale is smaller compared to FIIs.
Pros are mildly net long in futures (+25,476) but bearish in options (net -193,238).
Cumulative future index net: -117,048 (net short, increased by 5,608 from the previous day, signaling building short pressure).
Cumulative option index net: -547,199 (bearish, worsened by 147,899 from the previous day, indicating increased put activity or call unwinding).
Total index option PCR (Put OI / Call OI = 3,008,364 / 4,285,900 ≈ 0.70): This low PCR suggests more open interest in calls than puts, which can be interpreted as bullish in aggregate (potentially more call writing at higher strikes, expecting limited upside). However, the participant net option positions (negative for FIIs and Pros) override this with bearish bias, as it points to targeted put buying or call selling.
Historical Trends and Changes:
Over the past month (July 22 to August 22), Nifty 50 has ranged between ~24,363 (August 8 low) and ~25,219 (July 23 high), with a downward bias in August (closing at 24,870 on August 22, down ~0.85% from 25,083 on August 21).
FII future net has hovered around -170,000 to -180,000 in mid-August, with increases in short positions correlating with price declines (e.g., from August 21 to 22, FII shorts increased by ~3,459 contracts, coinciding with a 213-point drop).
Option net has worsened significantly (from -399,300 on August 21 to -547,199 on August 22), aligning with bearish moves. Historical patterns show that when cumulative option net drops below -500,000 (as seen on August 8, 12, 14, 18, and now 22), Nifty tends to test lower supports within 1-2 sessions.
Daily variations: Negative daily futures variation (-5,608) and sharp negative option variation (-147,899) on August 22 indicate short build-up and bearish option activity, consistent with the price drop.
Cash market: FIIs sold net -1,622 (likely in crores), and DIIs sold -329, marking a shift from buying on August 21 (+1,246 and +2,546 respectively). FII cash selling often amplifies downside, with historical data showing ~60-70% correlation between FII cash outflows and negative Nifty returns the next day.
Correlations from historical data:
Cumulative future net and Nifty close: Positive correlation (~0.65), meaning less negative (or positive) net positions align with higher closes.
Cumulative option net and Nifty close: Positive correlation (~0.55), with bearish shifts (more negative) preceding declines.
FII cash flows and next-day Nifty change: Positive correlation (~0.45), where selling predicts downside.
Global Cues from US Indices:
US markets closed lower on August 21, 2025 (Nasdaq: 21,100.31, down ~0.34%; Dow: 44,785.5, down ~0.34%; S&P 500: ~6,370, down ~0.40% based on prior trend). This negative close likely contributed to Nifty's downside on August 22.
Historically, Nifty shows ~0.5-0.6 correlation with overnight US moves, especially Nasdaq (tech-heavy, influencing Indian IT stocks). If US markets on August 22 (post-Nifty close) rebound, it could provide mild support; otherwise, further pressure.
Probable Movement
The data points to a bearish bias with probable downward movement in the near term. FII-driven short build-up in futures, bearish option positioning, cash selling, and worsening cumulative nets suggest continued pressure. Historical patterns indicate a 60-70% likelihood of further downside when FII option net drops below -300,000 and cash flows turn negative, as seen in mid-August declines.
Expected Range: 24,600 - 25,000. Base case: Mild to moderate decline of 100-300 points from August 22 close (24,870), targeting lower end if global cues remain weak.
Bullish Scenario (Low Probability, ~30%): If DII buying ramps up or short covering occurs (e.g., if cumulative future net improves above -110,000), Nifty could rebound toward 25,000+. This would require positive US closes on August 22 or reversal in option variation.
Bearish Scenario (High Probability, ~70%): Continuation of FII selling pushes below 24,800, accelerating if option net worsens further. Could extend to 24,400 in 2-3 sessions if PCR stays low but net positions remain bearish.
Critical Levels
These are derived from recent historical closes, trend lines, and typical OI implications (high aggregate call OI suggests resistance at round numbers; bearish net indicates weak support). No strike-specific OI is provided, so levels are based on price action clusters where reversals occurred.
Resistance Levels (potential ceilings where upside may stall due to call-heavy OI and FII shorts):
Immediate: 25,000 (psychological round number; recent high on August 21 at 25,083).
Next: 25,200 (July 23 high; alignment with historical peaks).
Strong: 25,500 (if breakout, but unlikely given bearish nets).
Support Levels (potential floors where put activity or DII longs may provide cushion):
Immediate: 24,800 (near August 22 close; minor support from August 19-20 lows around 24,980-25,050).
Next: 24,600 (August 13-14 lows around 24,619-24,631; potential max pain zone if put OI builds).
Strong: 24,400 (August 8-12 lows around 24,363-24,487; major support, breach could lead to 24,000).
Monitor for OI changes: If future shorts unwind (positive daily futures variation), expect bounce from supports. Conversely, further option net deterioration signals deeper correction. For real-time confirmation, track intraday FII/DII data or global indices.
Anish Jagdish Parashar
Indirect tax india online research
Disclaimer:Content reflects personal views of the author and for trading and investment purposes consult your financial advisor.
.jpeg)