Market Sentiment – NIFTY 50 (as of 31-12-25)
Overall Bias: Cautiously Bullish with Overhead Supply
Trend is attempting continuation, but FIIs remain structurally short and the up-move is currently driven by option-side short covering + DII support, not by fresh FII futures longs.
1️⃣ Futures Positioning – Who is Really Driving the Move?
🔹 Latest (31-12-25)
DII Futures OI: +37,984 → Consistent long accumulation
FII Futures OI: -145,886 → Persistent structural shorts
PRO Futures OI: -7,944 → Light short bias
Cumulative Futures OI: -115,846
🔍 Interpretation
Despite price holding above 26,000, FIIs have NOT covered futures shorts.
This implies:
Rally is not a conviction trend yet
FIIs are allowing price to move up via options re-hedging, not futures covering.
👉 Classic “relief rally / squeeze-led” structure, not trend validation.
2️⃣ Options OI – The Key Change (This is Important)
🔹 31-12-25 Snapshot
FII Option OI: -226,293 → Net short options (calls dominance)
PRO Option OI: +171,402 → Aggressive option long build-up
Cumulative Option OI: -54,891
Daily Option OI Change: +291,136 (Strong positive swing)
🔍 What Changed vs Prior Days?
Until 30-12-25, options OI was deeply negative (heavy call writing).
On 31-12-25:
Sharp positive daily option OI change
Indicates call short covering / put writing below price
👉 This explains the impulsive up candle on the daily chart.
3️⃣ Chart + VPVR / OI Bars (Right Side) – Supply & Demand Zones
From the attached daily chart:
🟢 Green OI Bars (Demand / Acceptance)
25,900 – 26,050 → Strong HVN
25,750 – 25,820 → Secondary demand pocket
These zones align with:
Prior consolidation
DII long buildup
Value acceptance (VPVR support)
structural support base
🔴 Red OI Bars (Supply / Call Defense)
26,200 – 26,250
26,350 – 26,450
These levels show:
Fresh call writing
Overhead supply by FIIs
Likely zones of time correction / rejection
👉 Upside is not free-flowing yet.
4️⃣ Momentum & Structure Read (Daily Timeframe)
Price holding above short-term VWAP & rising averages
RSI ~ 56 → Healthy, but not overbought
MACD histogram still shallow → Momentum is improving, not explosive
This confirms:
Up-move is positional repair, not aggressive trend expansion.
5️⃣ Cash Market Context (Silent but Crucial)
FII Cash: -₹3,597 cr (selling continues)
DII Cash: +₹6,759 cr (absorbing supply)
👉 Index is being supported, not chased.
🔑 Market Sentiment Summary (Actionable)
Aspect
Reading
Trend
Mild Bullish
Strength
Short-covering led
Risk
FII futures shorts intact
Support
25,900 – 26,050
Resistance
26,200 → 26,450
Breakout Confirmation
Only above 26,450 with futures short covering
🎯 Probable Scenarios Ahead
✅ Bullish Continuation (Conditional)
Holds above 26,000
Option OI stays positive
Futures OI contraction continues
➡️ Target: 26,350 – 26,450
⚠️ Rejection / Range Play (More Likely Short-Term)
Failure near 26,200–26,250
Call writing re-emerges
FIIs add fresh futures shorts
➡️ Pullback to 26,050 / 25,900
🧠 Final Verdict
Market is in a “controlled bullish squeeze”, not a breakout trend.
Buy dips near demand zones, avoid chasing highs until FIIs show futures short covering
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 and investment purposes consult your financial advisor.
