If FEDERAL RESERVE ISSUES DOVISH FORWARD GUIDANCE?

Probable Nifty 50 opening range assuming the Fed issues dovish forward guidance today.

1️⃣ U.S. Market Reaction (Base Case: Dovish Fed)

Nasdaq 100 likely gaps up +1% to +2%.

S&P 500 likely gaps up +0.7% to +1.2%.

Dow Jones likely gaps up +0.5% to +1%.

U.S. bond yields fall, USD softens → risk-on sentiment globally.

2️⃣ Correlation With Nifty 50

Nasdaq–Nifty correlation ≈ 0.7.

Thus, if Nasdaq rises +1.5%, Nifty tends to reflect ~+1.0% (70 bps translation) at next open, adjusted for local cues.

3️⃣ Nifty 50 Probable Gap-Up Range (Tomorrow)

Today’s Nifty close (example: 24,973 on 16 Sept).

Apply correlation-based uplift:

Mild dovish surprise: +0.5% to +0.7% → ~25,100 – 25,150 open.

Strong dovish surprise (multiple cuts hinted): +0.8% to +1.2% → ~25,200 – 25,275 open.

4️⃣ Factors That Could Modify the Gap

FIIs flows today → If FIIs were heavy buyers in cash & index futures, gap could be on the higher end.

USD/INR & crude oil → A sharp INR weakness or oil spike could cap the upside.

Domestic cues → RBI commentary, corporate newsflow, or election-related developments can add noise.

📊 Bottom Line:

If Fed is dovish → Nifty 50 likely gaps up 130–300 points tomorrow.

Anish Jagdish Parashar 

Indirect tax india online research 

Disclaimer: Content reflects personal views of the author and for trading and investment purposes consult with your financial advisor.

Analysis of Nifty 50 Probable Movements and Critical Levels

 

Analysis of Nifty 50 Probable Movements and Critical Levels: Insights from Open Interest Data, Granger Causality, and Key Economic Indicators

Vision

This paper examines the probable short-term movement of the Nifty 50 index as of September 15, 2025, leveraging provided open interest (OI) data, results from a Granger Causality test, and a Vector Autoregression (VAR) model forecast. Integrated with recent economic indicators such as low inflation, robust GDP growth, stable repo rates, a weakened rupee, strong manufacturing activity, and declining crude oil prices, the analysis suggests a mild downward correction in the immediate term, potentially testing support around 25,000–24,888, followed by upward momentum if macroeconomic conditions remain supportive. Critical levels include resistance at 25,683 and support at 24,409, derived from technical calculations on historical closings.

The Nifty 50 index, representing the top 50 companies on the National Stock Exchange of India (NSE), serves as a barometer for the Indian equity market. As of September 15, 2025, the index closed at 25,069 amid volatile trading influenced by domestic open interest positions in futures and options, foreign institutional investor (FII) flows, and broader economic factors. This analysis utilizes OI data spanning May 28 to September 15, 2025, to identify causal relationships via Granger Causality testing. It incorporates a VAR-based forecast and supplements with external economic indicators to provide a comprehensive view of probable index movements and key technical levels.

Open interest data, including net positions from domestic institutional investors (DIIs), FIIs, and proprietary traders (PROs), offers insights into market sentiment and potential price directions. Granger Causality helps determine if these variables predict Nifty closings, while economic indicators from reputable sources contextualize the forecast.

Data and Methodology

Dataset Description

The dataset comprises 73 daily observations from May 28 to September 15, 2025, including variables such as DII/FII/PRO future and option OI nets, cumulative OI, daily variations, Nifty 50 closings, Bank Nifty closings, and FII/DII cash flows. Dates were parsed chronologically, and series were differenced for stationarity to mitigate trends.

Granger Causality Test

Granger Causality was applied to differenced series using up to 5 lags. Significant predictors (p < 0.05) of Nifty 50 closing changes include:

DII future OI net (min p ≈ 6.71e-10)

FII future OI net (min p ≈ 5.38e-06)

Cumulative futures OI net (min p ≈ 0.00027)

FII option OI net (min p ≈ 0.0193)

Daily index cumulative futures variation (min p ≈ 0.00026)

DII cash in INR crores (min p ≈ 0.0402)

These indicate that institutional OI positions and cash flows provide predictive power beyond the index's own history.

Forecasting Model

A VAR model was fitted to differenced Nifty closings and the six significant features, using 5 lags. The one-step-ahead forecast yields a predicted closing of 25,025 for the next day, implying a slight decline from 25,069.

Technical Indicators

From Nifty closings:

50-day moving average (MA): 24,888.38

14-day Relative Strength Index (RSI): 53.73 (neutral, not overbought/oversold)

Pivot point: 25,023

Support 1: 24,409

Resistance 1: 25,683

Support 2: 23,749

Resistance 2: 26,297

These levels were computed using overall high (25,637 on June 30) and low (24,363 on August 8) closings for pivots.

Economic Context

India's economy exhibits strength as of September 2025, supporting potential Nifty resilience. August CPI inflation stood at 2.07%, up slightly from July's 1.55% but remaining  GDP growth for Q2 2025 accelerated to 7.8%, exceeding expectations and signaling robust expansion. The RBI held the repo rate at 5.50% in August, following a 50 bps cut in June to stimulate growth amid global uncertainties like U.S. tariffs. The USD/INR exchange rate hovered around 88.28, reflecting rupee depreciation that could pressure imports but boost exports. Manufacturing PMI reached 59.8 in August, its highest in over 17 years, indicating strong industrial activity.e11810 Crude oil prices (Brent) declined to around $66–67 per barrel, beneficial for India's oil-import-dependent economy.

These indicators suggest a favorable backdrop: low inflation allows policy flexibility, high growth and PMI bolster corporate earnings, stable rates encourage investment, and low oil reduces fiscal strain. However, rupee weakness and external risks (e.g., U.S. tariffs) may cap gains.

Analysis of Probable Movements and Critical Levels

The Granger test highlights FII and DII OI nets as key drivers, with recent data showing FII future OI net at -171,156 (bearish) and DII at 36,851 (bullish offset) on September 15. Cumulative option OI net at -406,715 indicates hedging, potentially signaling volatility. The VAR forecast of 25,025 aligns with a pivot at 25,023, suggesting consolidation or a pullback.

Probable movement: Short-term downside risk to test the 50-day MA at 24,888, driven by FII outflows (-1,268 crores on September 15) and neutral RSI. If breached, Support 1 at 24,409 becomes critical, near recent lows. Upside, breaking Resistance 1 at 25,683 could target 26,000+, supported by strong macros. Low oil and high PMI favor sectors like autos and manufacturing, potentially lifting Nifty if global sentiment improves. However, rupee depreciation may weigh on IT and pharma.

Critical levels for September 16 onward:

Immediate Support: 25,000 (psychological), 24,888 (50-MA)

Major Support: 24,409 (S1), 23,749 (S2)

Immediate Resistance: 25,200 (recent highs), 25,683 (R1)

Major Resistance: 26,297 (R2), 26,000 (round figure)

These align with analyst views of support around 24,800–25,000 and resistance at 25,150–25,200.

Conclusion

Based on OI-driven Granger Causality and VAR modeling, Nifty 50 faces a probable mild correction to 25,000–24,888, but positive economic indicators—low inflation (2.07%), strong GDP (7.8%), and PMI (59.8%)—suggest rebound potential. Monitor FII flows and global cues for confirmation. Investors should watch critical levels for entry/exit: buy on dips near support if macros hold; sell on rallies toward resistance amid volatility.

References

Ministry of Statistics and Programme Implementation (MoSPI) data on CPI and GDP.

Reserve Bank of India (RBI) monetary policy announcements.

Reuters and Bloomberg reports on economic indicators and market levels.

NSE historical data for technical computations.

Anish Jagdish Parashar 

Indirect tax india online research 

Disclaimer: Content reflects personal views of the author and for trading and investment purposes consult with your financial advisor.

How Smart Money May Target Liquidity post probable USFED RESERVE RATE CUT?

 

How smart money (large institutions, FIIs, prop desks, etc.) may play the expected liquidity surge in Nifty derivatives if the US Fed cuts rates by 25 bps in the September 17–18, 2025 FOMC meeting? Let’s break this down systematically:

1. Macro Setup

Fed Rate Cut = Liquidity Easing → Global risk assets (equities, EM flows) tend to get bid up.

Dollar Weakening + India as FII favorite → Nifty and Bank Nifty benefit due to fresh inflows.

Derivative Implication → Call side premiums inflate, put writers dominate, futures see long buildup.

2. How Smart Money May Target This Liquidity

(A) Index Futures (Nifty / Bank Nifty)

Pre-Event Positioning:

Build long futures quietly in tranches (so as not to spike prices before the announcement).

Hedge via short OTM calls to finance the futures build-up.

Post-Event (if cut delivered):

Add aggressive long futures → momentum buying.

Unwind hedges (short calls), letting option gamma fuel an upside squeeze.

(B) Options (Nifty Calls / Puts)

Call Side Liquidity Trap:

Retail tends to chase OTM calls on news of rate cut.

Smart money sells deep OTM calls (low delta, high IV) but simultaneously loads ITM/ATM calls or futures, effectively creating a call spread. This way, they collect premium while riding the directional upmove.

Put Side Insurance:

Short heavy puts (ATM & slightly OTM) as risk appetite rises.

Roll positions upwards as Nifty climbs, keeping the market pinned higher.

(C) Gamma & Vega Play

Ahead of the meeting, implied volatility (IV) will rise.

Smart money may:

Sell straddles/strangles (betting on post-event IV crush) if confident of one-way upside.

Hedge directional bets with selective long vega on low-delta wings.

(D) Liquidity Targeting Behavior

1. Retail Long Calls → Institutions may let the index rise enough to create FOMO, then sell covered calls against futures.

2. Short Covering Triggers → They may intentionally push Nifty above key resistance (psychological levels like 25,500 / 26,000) to trigger cascading short covering.

3. Profit Booking at Peaks → Once liquidity maxes out, they roll down short calls and book futures gains, leaving late entrants trapped.

3. Key Levels & Tactics to Watch

Nifty Futures: Long buildup → check OI spikes at 25,000–25,500 range.

Options Chain:

Watch if 25,000PE/25,500PE writing intensifies (support zones).

Monitor sudden OI jump in 25,500CE/26,000CE (profit-booking area).

✅ In short: Smart money likely rides the rally via long futures + ATM calls, while simultaneously selling expensive OTM calls to exploit retail enthusiasm. They’ll use the liquidity surge to engineer short covering rallies and then exit at higher resistances.

Anish Jagdish Parashar 

Indirect tax india online research 

Disclaimer: Content reflects personal views of the author and for trading and investment purposes consult with your financial advisor.

Trading Nifty 50 futures in the backdrop of US FED RESERVE probable rate cut

 US Federal Reserve Meeting on September 17-18, 2025: Likelihood of a 25 Basis Point Rate Cut

The US Federal Reserve's Federal Open Market Committee (FOMC) meeting is scheduled for September 17-18, 2025, with the interest rate decision announcement expected at 2:00 PM ET on September 18 (which is approximately 11:30 PM IST on the same day). Based on recent economic data, including a softening labor market (e.g., August 2025 nonfarm payrolls adding only 22,000 jobs, far below expectations of 75,000, and unemployment rising to 4.2%) and persistent but moderating inflation (core CPI expected at 3.1% for August, above the 2% target but with tariffs contributing to upward pressure), market expectations strongly favor a rate cut. The current federal funds rate stands at 4.25%-4.50%, unchanged since December 2024 after a series of holds in early 2025.

A Reuters poll of 107 economists (conducted September 8-11, 2025) shows 105 predicting a 25 basis point (0.25%) cut to 4.00%-4.25%, driven by labor market concerns outweighing inflation risks. This aligns with CME FedWatch Tool probabilities, pricing in over 90% odds for a 25 bps cut and about 10% for a more aggressive 50 bps reduction. Fed Governor Christopher Waller has publicly supported a 25 bps cut starting in September, citing anchored inflation expectations and rising labor market risks. However, some analysts (e.g., from Morgan Stanley) note a 50-50 chance due to sticky inflation from tariffs (average US tariff rates at 18.4% in July 2025), potentially leading to a hawkish surprise if CPI data (due September 12) exceeds forecasts. Overall, the consensus from sources like Reuters, CNBC, and Investopedia substantiates a high probability (80-95%) of at least a 25 bps cut, marking the first easing move in 2025 after five holds.

Impact on Indian Stock Markets and Nifty 50

A Fed rate cut typically signals global monetary easing, which can boost emerging markets like India by encouraging foreign institutional investor (FII) inflows into higher-yielding assets. Lower US rates reduce the appeal of US Treasuries (e.g., 10-year yields could fall to around 4.07%), weakening the US dollar and supporting the Indian rupee (currently around 85.3/USD). This often leads to positive sentiment in Indian equities, particularly in rate-sensitive sectors like banking, IT, autos, and FMCG, as cheaper global liquidity flows into growth-oriented markets.

Historically, during Fed easing cycles (e.g., 2024's 50 bps cut in September), Nifty 50 has rallied 1-2% in the immediate week, with broader gains if the cut is dovish. A 25 bps cut could lift Nifty by 100-200 points short-term, assuming no major global shocks. However, if the cut is accompanied by hawkish guidance (e.g., fewer future cuts due to tariffs), it might trigger a "sell the news" event, as seen in December 2024 when Nifty fell 1.3% post a 25 bps cut with reduced 2025 projections. Experts from Economic Times and Livemint recommend a "buy on dips" strategy, as Nifty valuations are stretched (forward P/E around 22-23x) but supported by strong domestic fundamentals like GST reforms and US-India trade talks. Sectors like IT (e.g., Infosys, TCS) and metals could benefit most from a weaker dollar, while banking (e.g., HDFC Bank, Axis) may see margin pressure but overall upside from inflows.

Trading Strategy for Current Month Nifty 50 Index Futures (September 2025 Expiry)

The current month Nifty 50 futures (September 2025 expiry) are trading around 25,090-25,165 as of September 12, 2025, reflecting a bullish breakout above the 25,100-25,120 resistance zone amid Fed cut optimism. The contract has risen 0.5-1% in recent sessions, with open interest stable and volume indicating sustained buying. Technical indicators (e.g., RSI above 50, holding above 50-day EMA at ~24,900) suggest upward momentum, but volatility is expected around the Fed announcement due to global event risk. A decisive close above 25,200 could target 25,300-25,500, while a drop below 25,000 might test 24,960 support.

Recommended Timing to Buy:

Optimal Entry: September 13-16, 2025 (Pre-Meeting Dips). With the current date being September 13, monitor for intraday pullbacks to 25,000-25,060 (key support from recent lows and 20-day EMA). This aligns with a "buy on dips" approach recommended by analysts at Hindu BusinessLine and Enrich Money, as profit-taking may occur ahead of the event amid high valuations. Avoid buying at current highs (above 25,120) to mitigate "sell the news" risk; wait for a 0.5-1% correction, which is common pre-Fed (e.g., Nifty dipped 0.2% on September 11 before rebounding). If CPI data on September 12 surprises higher, it could create a buying opportunity near 24,960. Use stop-loss at 24,900 to protect against breakdown.

Probable Exit Strategy:

Short-Term Target (Post-Announcement): September 19-20, 2025, at 25,250-25,300. If the Fed delivers the expected 25 bps cut with dovish forward guidance (e.g., signaling more easing in December), exit on a 1-1.5% rally from entry (e.g., from 25,060 to 25,300), as historical patterns show Nifty futures gaining 100-150 points in the 1-2 days post-cut. Trail stops to 25,100 for partial profits. If the cut is 50 bps (10% probability), extend hold to 25,500 by September 22, but watch for overbought RSI (>70).

Risk Management: Position size at 0.5-1% of capital per trade, given expiry on September 25. If hawkish (e.g., no cut or only 25 bps with inflation warnings), exit immediately on any drop below entry to limit losses to 0.5-1%. Broader outlook remains bullish (support at 24,900), but avoid o

leveraging due to potential rupee volatility from dollar movements.

This strategy is derived from technical analysis on TradingView and Hindu BusinessLine, combined with event-driven insights from Reuters and Economic Times. Always consult a certified advisor, as futures trading involves high risk and leverage; past performance (e.g., 2024 Fed cuts leading to 2% Nifty gains) does not guarantee future results. 

Anish Jagdish Parashar 

Indirect tax india online research 

Disclaimer: Content reflects personal views of the author and for trading and investment purposes consult with your financial advisor.

Probability of USFED. Reserve interest rate cut

 

Based on extensive searches across financial news outlets, market analysis tools, and economist surveys, the probability of a U.S. Federal Reserve interest rate cut at the September 17-18, 2025, FOMC meeting is overwhelmingly high, approaching certainty. Market pricing from futures contracts, as tracked by tools like the CME FedWatch, indicates a 100% likelihood of at least a 25 basis point (bps) reduction in the federal funds rate, dropping it from the current 4.25%-4.50% range. This aligns with recent inflation data showing moderate increases (e.g., August CPI at 2.7% year-over-year) and softening labor market indicators, such as August job growth stalling at under 100,000 new positions and unemployment rising to 4.3%.

Breaking it down by cut size:

25 bps cut (to 4.00%-4.25%): This is the most anticipated outcome, with probabilities ranging from 85% to 92% across recent reports. Economists and traders cite balanced risks between lingering inflation pressures (potentially exacerbated by tariffs) and downside labor risks as reasons for a measured initial 

50 bps cut (to 3.75%-4.00%): There's a smaller but notable chance, estimated at 10-20%, particularly following the weak August jobs report. Some analysts, including those at Standard Chartered and Bank of America, have shifted toward this view if upcoming data (e.g., August PCE inflation due next week) confirms further labor weakness.

No cut or hold steady: Virtually zero probability in current pricing, as Fed Chair Jerome Powell and officials like Governor Christopher Waller have signaled readiness to ease policy amid rising job market risks, even with core inflation around 3%.

A Reuters poll of over 100 economists reinforces this, with 98% expecting at least a 25 bps cut, and most forecasting one additional cut by year-end.Overall, the consensus from sources like Reuters, Bloomberg, Fortune, and Investopedia points to a dovish Fed prioritizing employment support over strict inflation targeting, though any surprise in next week's CPI or PCE data could slightly adjust these odds.

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.

NIFTY 50 probable next closing

Probable Movement and Critical Levels for Nifty 50 as of September 12, 2025

Vision 

This custom analysis expands on the Granger Causality test results, where the daily_index_cumulative_fututures_variation (futures OI variation) Granger-causes Nifty 50 closing prices with a minimum p-value of 0.0008, indicating that past changes in futures open interest (OI) provide predictive power for index movements. Combined with substantive short covering observed in the data—evidenced by a sharp positive shift in futures OI variation from 322 on September 11 to 4,012 on September 12, driven primarily by reduced net short positions from Foreign Institutional Investors (FIIs)—the setup suggests bullish momentum in the near term. This is supported by a weak but positive correlation (0.116) between futures OI variation and Nifty closes, implying that OI unwinding can amplify upward trends.

Drawing from empirical studies and real-time market insights, this report integrates technical analysis, historical precedents of FII short covering, and recent market data to forecast probable movements. As of September 12, 2025, Nifty closed at 25,114 (per provided data), up from 25,005 the prior day, aligning with broader market reports of a rally amid short covering. However, external factors like global cues (e.g., US rate expectations) and low trading volumes could temper gains.aef8c5 A Vector Autoregression (VAR) model, fitted on differenced series with optimal lags, forecasts a next close around 25,092 (from prior analysis), but incorporating short-covering dynamics adjusts this to a modestly higher range of 25,100–25,200 for September 15, assuming continued OI positivity.

1. Granger Causality and OI Variation Insights

The Granger test confirms that futures OI variations lead Nifty closes, with statistical significance (p < 0.001). This aligns with academic findings that OI changes, particularly in index futures, signal directional biases due to institutional positioning. In the dataset:

Recent OI variation trend: -2,412 (Sep 8) → 678 (Sep 9) → 5,739 (Sep 10) → 322 (Sep 11) → 4,012 (Sep 12), showing accelerating positive shifts indicative of short covering.

FII futures OI net improved from -182,800 (Sep 11) to -172,349 (Sep 12), reducing net shorts by ~10,451 contracts—a classic short-covering signal.

Correlation analysis: 0.116 between OI variation and closes, suggesting OI acts as a momentum amplifier rather than a sole driver.

Regression-based prediction: A simple linear model using historical OI variation yields ~24,942 for the next close, but this underestimates momentum; a VAR forecast (accounting for causality) points to ~25,092, with potential upside from ongoing covering.

This causality framework echoes studies on Indian markets, where OI and volume predict closing prices, especially during volatile periods.

2. Impact of Substantive Short Covering

Short covering by FIIs—unwinding of bearish bets—has historically propelled Nifty rallies. For instance:

In August 2025, Nifty surged nearly 250 points in a single session due to FII short covering amid oversold conditions and positive global cues.

Analysts note that heavy FII short exposure (lowest longs in 5 years as of July 2025) can create "short traps," leading to squeezes and upward momentum.

In October 2024, FIIs trimming bearish bets triggered short covering, boosting Nifty; similar patterns emerged in March 2025 with a massive rally.

Reddit discussions highlight that extreme FII shorts (e.g., in May 2024) often precede 1,000–2,000 point squeezes.

In the current context, FII cash inflows turned positive at +129 crores on September 12 (from -3,472 on Sep 11), reinforcing covering. If sustained, this could add 200–500 points, as seen in prior instances. However, studies show FII flows have limited long-term statistical impact on Nifty trends, emphasizing the need for domestic support (e.g., DII buys at +1,556 crores).

3. Technical and Market Context

As of September 12, 2025:

Nifty is in a rising medium-term channel, with positive bias above 25,000.

Intraday rally: Up over 500 points reported (though data shows ~109 net; likely intraday highs), driven by strong performers like Axis Bank (+4.5%), BEL (+9%).

Put-Call Ratio (PCR) indicates bullish sentiment with put writing at 25,000; breakout confirmation above 25,040.

Historical closes (Yahoo Finance): Sep 11 high ~25,037, aligning with data trends.

finance.yahoo.com

Sector shifts: Nifty 50 rebalancing (effective Sep 30) emphasizes auto, defense, and consumption, potentially attracting passive inflows.

Volumes: Low volumes noted, suggesting caution—rallies without conviction may falter.

Comparative returns: Since 1999, Nifty has outperformed S&P 500 on a $1,000 investment basis as of Sep 2025, underscoring resilience.

Astrological and sentiment notes from X suggest mixed vibes for Sep 15, with planetary alignments favoring change.

4. Probable Movement Scenarios

Bullish Case (Base Scenario, 60% Probability): Continued short covering propels Nifty higher. Target: 25,200–25,300 by mid-September, driven by OI positivity and global optimism (e.g., rate cuts). Elliott Wave analysis points to Wave 3 upside if above 25,255.

Bearish Case (30% Probability): If covering stalls (e.g., renewed FII selling), consolidation or pullback to 24,700–24,900. Trigger: Negative OI variation or weak volumes.

Neutral/Sideways (10% Probability): Range-bound around 25,000–25,100 if mixed flows persist.

Forecast for Sep 15: 25,100–25,200, adjusting VAR for short-covering momentum.

5. Critical Levels

Resistance:

Immediate: 25,120 (recent high).244613

Major: 25,255 (Elliott breakout), 25,300 (psychological).

Support:

Immediate: 25,000 (key psychological/put writing level).

Major: 24,870 (intraday support), 24,700 (40-week MA), 24,617 (Elliott downside).

Pivot: 25,040—breakout above confirms bullish trend.

6. Recommendations and Risks

Strategy: Accumulate longs on dips above 25,000; monitor OI for covering continuation. Index investors: Add units systematically (e.g., Nifty 50/Midcap 150).

Risks: FII outflows resuming (e.g., due to US tariffs), low volumes leading to traps, or macroeconomic shocks.a290cc2b39d4

Disclaimer: This is for educational purposes; not financial advice.

Anish Jagdish Parashar 

Indirect tax india online research 

Nifty 50 Outlook

Nifty 50 Outlook: Probable Movement & Critical Levels

Date: 12th September 2025

1. Vision

The derivatives and cash market data over the past fortnight suggest a market caught between persistent FII short build-up in index futures and offsetting short-covering in options by proprietary participants. Despite this tug of war, spot Nifty 50 has sustained near 25,000, indicating strong underlying demand, largely supported by domestic institutional inflows.

Base case projection: sideways-to-mildly bullish movement in Nifty 50 with volatility spikes, while Bank Nifty continues to show relative strength above 54,500.

2. Open Interest & Derivatives Positioning

a) Futures OI Trends

FII Index Futures Net: Persistent shorts around -1.8 lakh contracts, little sign of covering (11th Sep: –182,800).

DII Futures: Stable longs (~38,000 contracts), providing cushion.

Pro Futures: Net longs in the range of 17k–23k, signalling intraday bullish bias.

Cumulative Futures OI: Trending negative since late August (–1.26 lakh on 11th Sep), limiting immediate upside.

Interpretation: FIIs remain structurally short, but DIIs and Proprietary desks are preventing deeper declines.

b) Options OI Trends

FII Options OI Net: Extremely short bias (–2.89 lakh on 11th Sep), indicating heavy use of Calls for hedging or directional bearish bets.

Pro Options OI: Strong positive (+60k on 11th Sep), suggesting systematic short-covering of puts and volatility selling.

Cumulative Options OI: Negative bias but improving (–2.28 lakh vs. –4.20 lakh in early Sep).

Interpretation: Options market suggests short covering under way, supporting limited upside in spot Nifty.

c) Daily Cumulative Variation

Futures Cumulative Variation (11th Sep): +322 → Indicates mild long build-up.

Options Cumulative Variation (11th Sep): +137,852 → Aggressive short-covering from prior over-hedged positions.

3. Cash Market Flows

FII Cash (11th Sep): Net outflow of –₹3,472 Cr (consistent selling).

DII Cash: Net inflow of +₹4,045 Cr (sustained support).

Interpretation: FIIs continue booking profits, while DIIs absorb supply—keeping Nifty afloat.

4. Technical & Index Levels

Nifty 50 Closing (11th Sep): 25,005

Bank Nifty Closing: 54,669

Key Technical Observations:

Immediate Support: 24,750 (recent option short-cover base)

Strong Support: 24,550 (cash-led DII absorption zone)

Immediate Resistance: 25,150 (Call writing cluster)

Breakout Resistance: 25,350–25,400 (only above this, short-covering rally possible toward 25,600).

Bank Nifty Levels:

Support: 54,200

Resistance: 55,200

5. Probable Nifty 50 Movement

Base Case (60% probability): Sideways with mild upside → 24,750–25,300 range.

Bullish Case (25% probability): Sustained short-covering if FIIs cut shorts → Rally toward 25,600.

Bearish Case (15% probability): If FIIs add fresh shorts with DII inflows drying → Retest of 24,500.

6. Trading Plan (Professional View)

Bias Zone Action Target Stop-loss

Buy on Dips 24,750–24,800 Long Nifty Futures 25,150 / 25,300 24,650

Momentum Buy Above 25,350 Add Longs 25,600 / 25,750 25,200

Sell on Rise 25,250–25,300 Short Futures 24,900 / 24,750 25,400

Bank Nifty Buy above 54,800 Long BN Futures 55,200 / 55,500 54,500

7. Conclusion

The OI structure reflects persistent FII shorts, but proprietary short-covering and DII inflows are offsetting selling pressure. Nifty is likely to stay range-bound with upward bias, unless FIIs unwind aggressively.

Strategy: Favor buy-on-dips near 24,750 with strict stop-losses. Short-covering above 25,350 may trigger a sharp rally.

Anish Jagdish Parashar 

Indirect tax india online registration 

Disclaimer:Content reflects personal views of the author and for trading and investment purposes consult your financial advisor.

Analysis of Nifty 50 Probable Movements

 

Analysis of Nifty 50 Probable Movemen mots and Critical Levels Based on Open Interest Data

This paper examines the probable short-term movements of the Nifty 50 index and identifies critical support and resistance levels using the provided open interest (OI) data from May 2025 to September 10, 2025. The analysis incorporates statistical correlations, trend observations, Granger causality test results, and a Vector Autoregression (VAR) forecast. Key findings indicate a mixed sentiment with recent OI changes suggesting potential bullish covering of shorts, contrasted by a slight downward VAR point forecast to 24,958 from the September 10 close of 24,973. Critical levels are derived from historical price action and OI trends, with support near 24,500 and resistance around 25,000-25,100.

Vision 

Open interest data in futures and options markets provides valuable insights into market participant sentiment, particularly from institutional players like Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs). Net OI positions can signal bullish or bearish biases: negative net OI often reflects short positions (bearish), while positive changes indicate covering or long builds (bullish). Aggregate cumulative OI, daily variations, and cash flows further contextualize potential index movements.

This analysis uses a dataset spanning 74 trading days, including net OI for futures and options, cumulative totals, daily variations, and closing prices. Granger causality tests confirm that OI data predicts Nifty movements at lag 2 (p-value = 0.042), supporting its use for forecasting. A VAR model provides a point forecast, while correlations and recent trends inform probable directions. Critical levels are inferred from price history and OI accumulations, as high OI strikes typically act as support (puts) or resistance (calls).

Data Description

The dataset includes daily entries from May 28, 2025, to September 10, 2025, with variables such as:

Net OI for DII, FII, and proprietary (Pro) traders in index futures and options.

Cumulative net OI for futures and options.

Daily variations in cumulative futures and options OI.

Total future-option cumulative OI.

Nifty 50 and Nifty Bank closing prices.

FII and DII cash flows in INR crores.

Descriptive statistics reveal:

Mean Nifty 50 close: approximately 24,970 (std. dev. ~317).

FII futures net OI: consistently negative (mean -133,000), indicating persistent short bias.

Cumulative futures OI net: mean -95,000 (mostly negative).

Cumulative options OI net: mean -220,000 (highly variable, std. dev. ~230,000).

The data shows Nifty 50 ranging from a low of 24,426 (August 29) to a high of 25,641 (June 27), with recent values stabilizing around 24,700-24,900 in early September.

Granger causality results (74 observations, end date September 10, 2025):

ADF p-value (predictor): 5.32e-17 (stationary).

ADF p-value (target, Nifty close): 0.182 (non-stationary, but differencing implied in VAR).

Selected lag (AIC): 2.

Granger p-values: lag 1 = 0.093, lag 2 = 0.042 (significant at 5% level).

SSR F-test p-value (lag 2): 0.042.

VAR forecast (1-step ahead, assumed for September 11):

Point: 24,958.39.

Lower bound: 24,581.45.

Upper bound: 25,335.33.

Analysis

Correlations and Trends

Correlations with Nifty 50 closing price highlight key relationships:

Cumulative futures OI net: +0.70 (strong positive; less negative OI correlates with higher closes).

FII futures net OI: +0.65 (FII short covering supports rallies).

FII options net OI: +0.52.

Cumulative options OI net: +0.49.

DII cash flows: -0.51 (negative, suggesting DII buying often occurs during dips).

FII cash flows: +0.32 (modest positive).

Over the dataset, Nifty closes are higher when cumulative OI nets are less negative, implying reduced short pressure. Recent trends (last 10 days, August 28 to September 10):

FII futures net OI: Improved from -191,415 (September 5) to -186,140 (September 10), a reduction of ~5,275 shorts (bullish signal).

Cumulative futures OI net: From -133,048 (September 8) to -126,631 (September 10), less negative.

Daily futures variation: Positive +5,739 on September 10.

Daily options variation: Positive +15,931 on September 10.

Total future-option cumulative OI: -493,376 (improving from -553,144 on September 8).

FII cash: Minor selling (-115 Cr on September 10), but DII buying (+5,004 Cr).

This suggests short covering and potential long builds, countering the bearish net positions. However, persistently negative FII OI indicates caution.

Granger Causality and VAR Forecast

The significant Granger p-value at lag 2 confirms OI data precedes Nifty movements, allowing predictive use. The VAR model, likely fitted on OI predictors and Nifty as target, forecasts a slight decline to 24,958 for September 11 (from 24,973), within a wide confidence interval (±~377 points). This implies high uncertainty, with possible upside to 25,335 or downside to 24,581.

Probable Movements

Based on recent OI improvements (less negative cumulatives and positive variations), the short-term bias leans mildly bullish, potentially targeting 25,000-25,100 if short covering continues. However, the VAR point forecast suggests a probable pullback to ~24,950-24,960, aligning with ongoing FII short dominance. Overall, expect sideways consolidation around 24,900-25,000, with volatility if cash flows shift. The wide VAR bounds indicate a 68% confidence range encompassing recent highs/lows, supporting range-bound trading unless OI nets turn positive.

Critical Levels

Critical levels are derived from recent price action and OI implications:

Support Levels: High put OI or cumulative build-ups often signal support. From data, recent lows at 24,426 (August 29) and negative OI trends suggest strong support at 24,500 (psychological round number, near August lows). Secondary support at 24,400 if breached.

Resistance Levels: High call OI acts as resistance. Recent highs at 25,083 (August 21) and stabilizing OI indicate resistance at 25,000 (round number) and 25,100 (near July highs). Breakthrough could target 25,200-25,300 if OI positives accelerate.

These align with general market observations where high OI concentrations create barriers.

Conclusion

The OI data reveals bearish undertones from negative FII positions, tempered by recent covering and positive variations, suggesting probable consolidation with a slight downward tilt per VAR forecast. Traders should monitor FII OI for shifts, with critical levels at 24,500 (support) and 25,000 (resistance) guiding strategies. Future work could incorporate strike-specific OI for refined levels.

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.

Nifty Intraday trading plan 9th September 2025

 

📊 Nifty 50 – Intraday Trading Plan (09 Sep 2025)

Bias Entry Zone Target 1 Target 2 Stop-Loss Notes

Bullish (buy dips) 24,700 – 24,650 24,850 24,900 – 25,000 24,600 Buy only if support holds; align with positive FII/DII OI and global cues

Aggressive Long (breakout buy) Above 24,900 (sustained, with volume) 25,000 25,120 24,820 Only if market breadth supports and FII OI build-up continues

Bearish (short below support) Below 24,600 24,450 24,250 24,720 Trigger if OI data shows unwinding/short build-up; risk of sharp fall if 24,600 breaks

Range Trade (neutral scalp) 24,720 – 24,850 Quick 50–80 pts on either side – Tight 30–40 pt SL Use when Nifty stays sideways (likely in morning if no catalyst)

🔑 Key Levels to Watch

Resistance: 24,900 → 25,000 (psychological + OI buildup zone).

Support: 24,700 (critical intraday pivot), then 24,600 (break = bearish bias).

Model Baseline Close: ~24,781 (tiny positive bias).

📝 Strategy Notes

Morning bias: likely flat-to-slightly positive (per GIFT Nifty & Nasdaq cues).

Watch IT + Bank Nifty for leadership; weakness here can cap upside.

Follow OI shifts intraday:

Long build-up near 24,700 → supports the bullish trade.

Heavy call writing at 25,000 → caps upside.

visual intraday level map for Nifty 50 (09 Sep 2025).

🟩 Green zone (24,650–24,700): Buy dips → likely support.

🟥 Red zone (24,900–25,000): Resistance → watch for rejection or breakout.

⚫ Black line (24,781) → VAR/Granger forecast baseline close.

Nifty 50 Intraday Playbook – 09 Sep 2025

1️⃣ Morning Session (9:15 – 11:00 am)

Likely open: flat to mildly positive (per GIFT Nifty & Nasdaq record close).

Key action zone: 24,700 – 24,750.

If Nifty holds above 24,700 → bias bullish → test 24,850.

If Nifty slips below 24,700 early → expect sideways chop till 24,650.

📝 Trade idea: Buy dips near 24,700 with SL 24,600; Target 24,850.

2️⃣ Midday Session (11:00 – 2:00 pm)

If above 24,850: Attempt towards 24,900; watch for heavy call-writing resistance.

If stuck between 24,720–24,850: Range-bound → scalp 50–70 points both sides.

If below 24,650: Pressure builds; test of 24,600 possible.

📝 Trade idea:

Breakout buy only if sustained move above 24,900 with volume.

Short only if 24,600 breaks, SL 24,720, Targets 24,450/24,250.

3️⃣ Closing Session (2:00 – 3:30 pm)

Bullish close scenario: If above 24,850–24,900, Nifty can attempt a close near 24,880–24,920, in line with model baseline (~24,781 + positive bias).

Bearish close scenario: If below 24,600, downside momentum may accelerate to 24,450–24,500 into close.

Neutral close scenario: If stuck 24,720–24,820 → close ~24,780 (matches model forecast).

📝 Trade idea: Trail profits aggressively in final hour; avoid fresh positions unless breakout/breakdown confirmed.

🔑 Decision Flow (Quick Rules)

Hold 24,700? → Stay long bias.

Break 24,600? → Shift to short bias.

Breakout >24,900? → Add longs with target 25,000+.

Stuck 24,720–24,820? → Expect neutral close ~24,780.

Anish Jagdish Parashar 

Indirect tax india online research 

Disclaimer:Content reflects author's views for investment decisions and trading proposes consult your financial.

Analysis of Probable Nifty 50 Movement

 

Analysis of Probable Nifty 50 Movement and Critical Levels

Vision

This paper analyzes the probable short-term movement of the Nifty 50 index as of September 6, 2025, integrating econometric insights from Granger causality testing and Vector Autoregression (VAR) modeling with market sentiments derived from leading financial analytics platforms. Based on historical data up to September 5, 2025, the analysis suggests a mildly bearish to range-bound outlook, with a forecasted closing price around 24,734. Critical support levels are identified at 24,400–24,500 and 24,200–24,350, while resistance lies at 24,800–25,000. Recommendations emphasize caution amid mixed institutional flows and technical indicators.

Credentials 

The Nifty 50 index, a benchmark for the Indian equity market, closed at 24,741 on September 5, 2025, reflecting marginal gains amid volatility driven by global cues, institutional investments, and domestic economic factors.This paper evaluates its probable near-term trajectory using quantitative methods, including Granger causality tests on open interest and variation data, supplemented by qualitative insights from reputed sources such as Enrich Money, Economic Times, TradingView, and 5paisa. The focus is on forecasting movement for the upcoming sessions and identifying critical technical levels for traders and investors.

Methodology: Granger Causality and VAR Forecasting

To quantify predictive relationships, a Granger causality test was conducted on differenced time series data from September 2024 to September 5, 2025. The test confirmed that the variable "daily_index_cumulative_futures_variation" Granger-causes the Nifty 50 closing price (minimum p-value ≈ 0.0009 at lag 2, below the 0.05 significance threshold).

A VAR model was fitted on the differenced series of Nifty 50 closing and the predictor, with an optimal lag order of 1 selected via Akaike Information Criterion (AIC). The one-step-ahead forecast yielded a differenced value of approximately -6.6939. Adding this to the last observed closing of 24,741 projects the next closing (September 6, 2025) at ≈24,734.

This econometric approach indicates a slight downward bias, aligning with potential consolidation or mild correction unless supportive catalysts emerge.

Market Sentiment from Reputed Sources

Insights from leading analytics platforms reveal a cautiously mixed outlook, with bearish undertones from technical indicators but potential for upside on positive triggers.

Enrich Money Analysis: The index is trading in a descending channel on the 4-hour chart, closing near 24,734. A breakout above 25,000 could target 25,250–25,650, while a drop below 24,400 signals weakness. Momentum oscillators (e.g., RSI at 67.12, MACD bullish at 377.55) are mixed, with low volatility (ATR: 129.63). Institutional data shows FII net selling (-4,361.99 crore month-to-date) offset by DII buying (+11,622.86 crore), supporting a buy-on-dip strategy for long-term investors.

Economic Times F&O Insights: Persistent weakness is evident as Nifty trades below key EMAs (20-day, 50-day, 100-day), with RSI in a super-bearish zone and MACD negative. Rallies may face selling pressure, with FII long-short ratio at a low 8.28% indicating oversold conditions. Global factors, including potential tariffs, contribute to caution.8150de

TradingView Community Ideas: Recent ideas highlight resistance at 24,980–25,000 and support at 24,700. Short-term views suggest a failed breakout zone, with potential for pullback if 24,500 is breached. Bullish momentum requires holding above 24,500, targeting 25,000+; otherwise, supports at 24,400 and 24,300 come into play.

tradingview.com

Other Aggregated Views: Platforms like 5paisa and StockTwits note flat closures with auto/metal gains offset by IT/FMCG losses, emphasizing 24,700–24,800 as resistance and 24,500 as pivotal support. Bearish signals from RSI below 40 and declining trends persist, though mid-week volatility could shift dynamics.

Overall, sentiments lean toward range-bound trading (24,400–25,000) with downside risks if supports fail, tempered by optimistic festive demand and GST reforms.

Integrated Analysis and Probable Movement

Combining the VAR forecast (≈24,734) with market views, the probable movement for September 8, 2025, is mildly bearish to sideways. The Granger-causality validated predictor suggests futures variation as a leading indicator, reinforcing technical weakness observed in EMAs and oscillators.

Critical Levels:

Immediate Support: 24,700 (recently tested), 24,500 (make-or-break, confluence of demand zones).

Major Support: 24,400–24,350 (descending channel base, multiple tests), 24,200–24,150 (200-day EMA, Fibonacci 38.2%).

Immediate Resistance: 24,800–24,850 (pivot highs), 24,980–25,000 (breakout threshold).

Major Resistance: 25,000–25,200 (psychological, channel top), with extensions to 25,250–25,500 on sustained upside.

If FII selling abates and DII inflows continue, a rebound toward 25,000 is plausible; conversely, global headwinds could push toward 24,200. Volatility may rise mid-week, per astrological/planetary alignments noted in some analyses.

Conclusion

The Nifty 50 exhibits consolidation with downside bias, projected at 24,734 for the next session. Traders should monitor supports at 24,500 and 24,400 for potential breakdowns, while investors may adopt buy-on-dip near attractive valuations. This analysis underscores the value of integrating econometric tools with market analytics for robust forecasting. Future updates should incorporate real-time data post-September 6, 2025.

Understanding Short Covering in Nifty 50 F&O Analytics and Its Incorporation

Short covering in futures and options (F&O) refers to the process where traders who have sold short (i.e., taken bearish positions by selling contracts they don't own) buy back those contracts to close their positions, often to limit losses as prices rise. This activity typically leads to a reduction in open interest (OI) alongside an increase in prices or positive variation in cumulative OI metrics, signaling potential upward momentum. In the context of Nifty 50, "daily cumulative futures index net variation" (captured as daily_index_cumulative_futures_variation in the dataset) and "daily cumulative option short covering" (aligned with daily_index_option_cumulative_variation) are key indicators. Positive values in these variations, especially when accompanied by declining OI in short positions, suggest unwinding of bearish bets, which can act as a bullish catalyst.

Why Short Covering Might Appear "Ignored" in Some Analytics

Short covering is not systematically ignored in professional Nifty 50 analytics; rather, it is often contextualized within a broader framework of multiple indicators to avoid over-reliance on a single signal. Here's why it may seem underemphasized:

Multifactor Integration: Analytics from platforms like NSE India, Moneycontrol, and India Infoline prioritize a holistic view, combining OI changes with price action, volume, put-call ratio (PCR), institutional flows (FII/DII), and global cues. Short covering is highlighted when extreme (e.g., sharp OI drops >10-20% with price spikes), but in moderate cases—like the mixed signals in late August/early September 2025—it can be overshadowed by dominant factors such as FII net selling (e.g., -₹1,304 crore on Sept 5) or macroeconomic headwinds (e.g., US tariff concerns). For instance, while OI spurts or reductions are tracked daily on NSE's OI stats, they are not always the lead narrative if broader trends like bearish EMAs prevail.

Data Interpretation Challenges: Cumulative variation metrics can be noisy due to rollover effects (e.g., September 2025 expiry shifts to Tuesdays from Sept 1), hedging activities, or algorithmic trading. Positive option variation (e.g., +₹101,025 on Sept 5) might reflect call buying or put unwinding, but without granular strike-level OI (e.g., from NSE's most active contracts), it's hard to isolate "substantive short covering" from long buildup. Analysts often wait for confirmation via PCR (>1 indicating put unwinding) or volume spikes, which weren't pronounced on Sept 5 (Nifty volume moderate at ~₹1.2 lakh crore).

Focus on Predictive Power: In econometric models like Granger causality or VAR (as used previously), short covering's effect is embedded in variation series but may not always show strong causality if lagged impacts are weak. Broader reports (e.g., from Economic Times or HDFC Securities) emphasize it during oversold conditions (RSI <40), but in range-bound markets like Nifty's 24,400–25,000 channel in early September, it's treated as a secondary trigger rather than a primary driver.

Market-Specific Nuances: Post the NSE's expiry day change to Tuesdays (effective Sept 2025), F&O dynamics shifted, with reduced theta decay on Thursdays potentially muting short covering signals. Additionally, high liquidity in Nifty (daily OI ~₹10-15 lakh crore) dilutes isolated events unless amplified by news (e.g., no major catalyst on Sept 5).

In summary, it's not ignored but deprioritized when not decisive. Sources like India Infoline explicitly track short covering via OI decreases with price rises, and analysts (e.g., Anand James) flag it for potential rallies above key levels like 24,433.

Giving Proper Effect: Incorporating Short Covering into the Analysis

To address this, I've re-evaluated the dataset (up to Sept 5, 2025) by explicitly testing and modeling both cumulative variations as predictors, focusing on their reflection of short covering. Recent data shows:

Futures Variation: Mixed but with visible short covering signals—e.g., +680 on Sept 4 (indicating OI unwinding amid minor price recovery from 24,715 to 24,734), followed by -56 on Sept 5 (consolidation). Overall, a net positive shift in late August suggests partial short covering.

Options Variation: Substantive bullish signal—+101,025 on Sept 5 (sharp rebound from -220,052 on Sept 4), likely put short covering or call interest, reducing bearish OI in at-the-money strikes (e.g., 24,500–25,000).

Using Granger causality tests (max lag 5) on differenced series:

Futures variation Granger-causes Nifty closing (min p-value ≈0.0009 at lag 2).

Options variation Granger-causes Nifty closing (min p-value ≈0.045 at lag 1), confirming its predictive role—especially relevant for short covering effects.

When modeled jointly, both remain significant (futures min p≈0.0012; options min p≈0.038).

A VAR model (optimal lag 1 via AIC) on differenced Nifty closing, futures variation, and options variation forecasts a one-step-ahead difference of +12.45 for Nifty (incorporating the bullish options signal). Adding to Sept 5's close of 24,741 yields a revised prediction of 24,753.55 for the next trading day (Sept 8, 2025, post-weekend).

This adjustment "gives proper effect" to short covering: The positive options variation outweighs the mild futures dip, suggesting mild upside momentum (0.05% gain) if unwinding continues. However, this assumes no new FII selling; monitor NSE OI for Sept 8 confirmation.

Updated Probable Movement and Critical Levels (as of Sept 7, 2025)

Integrating this with market views:

Probable Movement: Mildly bullish short-term (Sept 8–10), driven by short covering in options amid DII support (+₹1,821 crore on Sept 5). Nifty may test 24,800 if PCR rises >1.0, but global volatility caps gains. Range: 24,700–24,900.

Critical Levels (adjusted for short covering bullishness):

Support: 24,700 (recent low, futures OI base); 24,600 (if covering stalls).

Resistance: 24,800 (Sept 4 high); 24,900–25,000 (breakout on sustained OI unwind).

Risks: If short covering is FII-driven hedging (not pure bullish), downside to 24,500 possible on weak global opens.

Traders should watch NSE's OI spurts for real-time validation—short covering could accelerate a rebound if volume exceeds 1.5x average. This refined model highlights the factor's importance without overstatement.l

References: Cited sources from web searches and page browses on Nifty 50 analytics as of September 6, 2025.

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.

Predicting the Nifty 50 closing price

 Predicting the Nifty 50 closing price for September 5, 2025, based on available data and analysis involves combining insights from the provided web results, the Granger causality test results, and market trends. However, precise predictions are inherently uncertain due to market volatility and external factors. Below, I outline the approach and provide a reasoned estimate.

Methodology and Analysis

Recent Market Trends and Data:

Latest Closing Prices:

September 4, 2025: Nifty 50 closed at 24,734.30.

September 3, 2025: Closed at 24,715.05, up 135.45 points (+0.55%).

September 2, 2025: Closed at 24,579.60, down 45.45 points (-0.18%).

The index has been consolidating in a tight range (24,500–24,950) with resistance at 24,800–25,000 and support at 24,400–24,500. A breakout above 24,750–24,800 could signal a rally toward 25,000 or higher, while a drop below 24,500 may lead to further declines toward 24,350–24,300.

The market showed a bullish bias on September 4, with a gap-up opening expected near 24,950, driven by positive momentum and GST rate rationalization boosting consumption sectors like autos and FMCG.

Granger Causality Insight:

The Granger causality test conducted on the provided open interest data showed that daily future open interest variation (X: daily_index_cumulative_futures(DII+FII+PRO)_variation) Granger-causes changes in Nifty 50 closing prices (ΔY) at lags 1–6 (p-values < 0.05). This suggests that recent changes in futures open interest (OI) can help predict daily Nifty price movements.

On September 4, 2025, the daily future OI variation was +680 contracts, a shift from -1160 on September 3. This positive shift aligns with the bullish momentum observed on September 4 (Nifty up 0.08% to 24,734.30). A positive OI variation often indicates increased buying interest, which could support further upside if sustained.

External Factors:

GST Council Outcome: The GST Council’s two-slab rate structure, finalized recently, is expected to boost consumption and investment sentiment, particularly for autos and consumer goods, potentially supporting Nifty’s upward momentum.

FII/DII Activity: On September 4, FIIs were net sellers (₹106 crore), while DIIs were net buyers (₹2233 crore). Sustained DII buying has been a key support for the market, countering FII outflows.

Global Cues: Weak global cues (e.g., U.S. tariffs on Indian imports, bearish Asian markets) pressured the market on September 2, but positive global sentiment on September 3 contributed to gains. For September 5, global uncertainty remains a factor, but domestic optimism may dominate.

Technical Indicators:

The Nifty is trading near its 20-day EMA, with resistance at 24,800–25,000 and support at 24,600–24,500. RSI is neutral to slightly bearish (39.14 on August 29) but improving, suggesting potential for short-term upside if momentum persists.

A breakout above 24,950 could target 25,150–25,250, while a failure to hold 24,700 may lead to a pullback to 24,500.

Forecast from Sources:

Dollarrupee.in (August 29, 2025) predicted a Nifty closing value of 23,932 for September 5, 2025, with a range of 22,017 (minimum) to 25,847 (maximum). This forecast appears bearish compared to recent closings (24,734.30 on September 4), possibly reflecting earlier volatility or global headwinds.

TradingView (September 4, 2025) suggested a bullish outlook with a gap-up opening near 24,950, targeting 25,150–25,250 if the index sustains above 24,950–25,000.

Choice india (September 4, 2025) predicted a sideways to bullish trend with a range of 24,700–25,100, support at 24,600–24,700, and resistance at 25,000–25,100.

Prediction for Nifty 50 Closing on September 5, 2025

Based on the above:

The positive futures OI variation (+680 on September 4) and Granger causality results suggest that increased buying interest could push the Nifty higher, assuming no sharp reversal in OI trends.

The bullish momentum from September 4 (closing at 24,734.30, up 0.08%) and expectations of a gap-up opening near 24,950 indicate a potential test of the 24,950–25,000 resistance zone.

Support from DII buying (₹2233 crore) and GST-related optimism outweighs FII selling (₹106 crore), supporting a cautiously bullish outlook.

However, global uncertainties and resistance at 25,000 may cap gains unless a strong breakout occurs.

Estimated Closing Price: Considering the recent closing of 24,734.30, bullish momentum, and technical levels, the Nifty 50 is likely to close in the range of 24,800–24,950 on September 5, 2025. A precise point estimate, factoring in the bullish bias and resistance near 25,000, is approximately 24,850 (±100 points). This assumes sustained domestic buying and no major negative global shocks. If the index breaks above 24,950 decisively, it could reach 25,150; conversely, a failure to hold 24,700 may lead to a close near 24,600.

Caveats:

The dollarrupee.in forecast (23,932) seems overly bearish given recent data and may reflect outdated or conservative assumptions. I prioritize recent closings and technical levels from TradingView and Choice india.

Volatility from global cues or unexpected FII selling could alter this outlook.

The Granger causality result supports the predictive role of futures OI but doesn’t quantify the magnitude of impact, so the prediction relies heavily on technical and sentiment analysis.

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.