1️⃣ Futures Positioning – Trend Still Capped
FII futures OI: –1,65,482 (18-Dec)
→ FIIs continue to hold aggressive net shorts, marginally increased vs previous sessions.
DII futures OI: +45,087
→ DIIs persistently absorbing supply → trend support, not trend reversal.
PRO futures OI: +14,721
→ Pros remain tactical longs, but size is not decisive.
🔎 Inference:
This is a classic “FII short vs DII long” stalemate, which historically results in:
Sideways to mild downside
Sharp intraday swings but poor follow-through
2️⃣ Options Structure – Range Clearly Defined
Cumulative option OI: –4.87 lakh
FII option OI: –3.12 lakh
→ Strong net option writing bias (calls > puts)
From volume profile & visible nodes on chart:
Major Call Supply Zone: 25,950 – 26,050
Heavy Put Base: 25,600 – 25,650
VWAP / value area acting near 25,750 – 25,800
🔎 Inference:
Options market is explicitly pricing a range, not a breakout.
3️⃣ Cash Market – No Panic Selling
FII cash buy (18-Dec): +₹595 cr
DII cash buy: +₹2,700 cr
Despite futures shorts, FIIs are not dumping cash stocks → indicates:
Hedge-driven shorts
Not a structural bearish view
4️⃣ Indicator + Chart Read (from attached image)
RSI hovering near mid- 40s → weak momentum, not oversold
MACD below signal → downside pressure intact but losing acceleration
Price holding above 25,650 high-volume support
Rejections visible near 25,950–26,000 (consistent with call writers)
5️⃣ Market Character (Very Important)
This is NOT a trending bear market.
This is a “sell-on-rise / buy-on-dip within range” market driven by:
FII futures shorts capping upside
DII cash + futures absorbing downside
Option writers compressing volatility
6️⃣ Probable NIFTY Path (Next 1–2 Sessions)
🔹 Base Case (High Probability)
Range: 25,650 – 26,000
Intraday rallies above 25,950 likely to face supply
Dips towards 25,650–25,700 likely to attract support buying
🔹 Bearish Expansion (Only If)
Sustained trade below 25,600
AND fresh FII futures short addition + put unwinding ➡️ Opens 25,450 → 25,300
🔹 Bullish Breakout (Low Probability)
Requires:
FII futures short covering
Call OI unwinding above 26,050 ➡️ Only then 26,200+ becomes viable
7️⃣ Sentiment Summary (Professional Conclusion)
Market is neutral-to-negative, range-bound, volatility-compressed.
Downside is protected by DII positioning, upside capped by FII call writing.
Expect mean-reversion trades, not directional moves.
Anish Jagdish Parashar
Indirecttaxindiaonline research
Disclaimer:Content reflects author's views; for investment decisions and trading proposes consult your financial advisor.
