Market Sentiment (as of 01-01-2026 close)
Overall Bias: Range-bound to mildly bearish with downside risk on failure to reclaim supply zone.
Trend remains distributional, not trending.
View & Vision
1️⃣ Futures Positioning – Who is carrying risk?
🔹 FIIs (Persistent Structural Shorts)
Consistently net short index futures for over a month
(−1.15 to −1.18 lakh contracts zone sustained).
No meaningful short covering even on rallies.
01-01-26: FII futures net −1,43,926 → confirms positional bearish conviction.
👉 Interpretation:
FIIs are selling rallies, not chasing breakdowns.
🔹 DIIs (Counter-trend Longs)
DIIs steadily adding longs (38k–45k range).
This explains why price is not collapsing despite FII pressure.
👉 Interpretation:
DIIs are providing price stability, not upside momentum.
🔹 PROs (Tactical, Not Committed)
PRO futures positioning oscillates, no directional dominance.
Indicates short-term trading, not trend creation.
2️⃣ Options Structure – Supply vs Demand
🔻 Cumulative Option OI (Still Net Negative)
Cumulative option OI remains deeply negative (−1.5 to −6 lakh range historically).
Indicates net call writing dominance over the entire rally.
🔁 Daily Option OI Change (01-01-26)
Daily option variation: −101,715
This is fresh call writing / re-hedging, not short covering.
👉 Interpretation:
Upside is actively capped, not being allowed to expand.
3️⃣ Price + Volume Profile (From Attached Daily Chart)
📍 Key Observations
Price near 26146, sitting inside a high-volume supply band.
VPVR shows heavy red (supply) nodes above price, especially:
26180–26250
Green demand pockets exist lower, but far apart, indicating:
Support exists, but momentum is weak.
📉 Candle Structure
Long wicks near highs → selling pressure on rallies
No impulsive bullish candle despite multiple attempts.
4️⃣ Momentum Indicators (Daily)
RSI ~56 → neutral, not bullish
Momentum flattening → loss of thrust
No bullish expansion phase visible.
5️⃣ Cash Market Flow (Confirmation)
FIIs consistently net sellers in cash (−₹3,000 to −₹4,000 Cr zone).
DIIs absorbing supply, but absorption ≠ breakout.
👉 This is classic distribution with support, not accumulation.
6️⃣ Market State Classification
Parameter
Reading
Trend
Sideways to Down
Structure
Distribution
FII Bias
Strongly Bearish
DII Role
Cushioning
Option Writers
In Control
Breakout Probability
Low
Breakdown Probability
Conditional
7️⃣ Actionable View (Professional)
🔴 Primary Scenario (Higher Probability)
Sell on rise into 26180–26250
Expect mean reversion back towards demand zones.
🟢 Alternate Scenario (Lower Probability)
Sustained close above 26250 + option short covering
Only then upside opens to 26400+
Until then, rallies are hedged rallies.
8️⃣ Summary in One Line
“Nifty is being supported from below but capped from above — FIIs are distributing risk, option writers are defending supply, and price is trapped in a controlled
Anish Jagdish Parashar
Indirect tax india online research
Disclaimer:Content reflects personal views of the author; for trading and investment purposes consult with your financial advisor.
