INDIRECTTAXINDIA.IN | DERIVATIVE DESK RESEARCH
NIFTY 50 — NEXT-SESSION MARKET OUTLOOK
Sentiment, Derivative Positioning & Elliott Wave Note
For Trading Session: Friday, 25 September 2026 | Data as of Close: Thursday, 24 September 2026 | Report Generated: 25 Sep 2026, Pre-Market
Institutional cash activity turned decisively negative into the 24 September close. Foreign Institutional Investors (FIIs) were net sellers of ■5,027 crore in the cash segment, reversing the previous session's modest buying of
1,617 crore, while Domestic Institutional Investors (DIIs) absorbed a large part of this supply with net purchases
of ■4,301 crore. The scale of the FII outflow — the sharpest single-day cash sale in the current data window — together with only partial DII cushioning, was sufficient to tip the index sentiment negative and is the single largest driver of the 1.64% fall in the Nifty 50 on the day.
The daily cumulative net Futures OI and cumulative net Options OI both swung sharply negative on 24 September, corroborating the cash-market signal. The cumulative net Futures OI variation printed -5,866 contracts and the cumulative net Options OI variation printed a much larger -4,76,289 contracts for the day — i.e., aggregate positioning built up decisively on the short side across both futures and options, a combination that typically precedes continued downside follow-through unless short-covering intervenes.
Read-through: FIIs are building fresh shorts in both futures and options simultaneously — the most bearish combination in positioning terms — while Proprietary desks are mixed (mildly adding index-futures longs even as they turn cautious in options). The Client/retail segment is running aggressively long on both futures and options even as the index falls, a classic smart-money vs. retail divergence that has historically preceded further downside once retail longs are forced to unwind. DII futures OI eased marginally, suggesting some profit-booking on the long book even as DII cash buying continued — indicating DIIs are supporting price in cash while trimming leveraged exposure.
The 29-September expiry option chain shows the futures trading at a premium of ~32 points to spot (23,095 vs 23,063), a normal cost-of-carry structure. Overall Put-Call Ratio (by OI) stands at a 0.73, while the at-the-money 23,100 strike carries a tighter PCR of 1.07. Strike-wise concentration:
Session-wide, aggregate Call OI change was a modest -1.62 lakh contracts against a much larger Put OI change of -22.66 lakh contracts — i.e., put writers / put longs unwound far more aggressively than call participants as the index fell through the session, keeping the PCR compressed to 0.73. This asymmetric put unwinding (rather than fresh, confident put writing at lower strikes) is itself a soft/bearish signal, since it shows a reluctance among option writers to defend lower levels with size. Immediate support therefore rests at 22,950 / 23,000, with the more durable floor at 22,800; resistance is layered at 23,150 – 23,200 and again at 23,300 – 23,400.
Wall Street closed lower on 24 September (session close as tracked into the Indian pre-market), with the S&P 500 and Dow Jones Industrial Average retreating as a renewed bout of Treasury-yield volatility and firming crude prices weighed on risk appetite; the 30-year yield pushed to its highest level since 2004 and the 10-year held near its highest since 2007. Into the close, however, the S&P 500 and the Nasdaq pared a larger part of the day's losses — and briefly crossed into positive territory — on revived hopes of a phased reopening deal for the Strait of Hormuz, even as the Dow and broader cyclical names stayed under pressure.
Why Nasdaq alone stayed comparatively resilient: the divergence is consistent with (a) the Nasdaq's heavier weighting toward mega-cap technology names that carried the 2026 rally and attracted renewed dip-buying on the Hormuz headline, (b) relative insulation of large-cap tech earnings from energy-cost pass-through versus industrials, transports and financials, and (c) index-level concentration, where strength in a handful of large constituents can lift the Nasdaq even as market breadth is negative. The Desk flags this concentration risk explicitly — a narrow, mega-cap-led bounce is a lower-quality signal than a broad-based rally, and the CBOE Volatility Index (VIX) nonetheless rose by roughly 3.23% on the session, confirming that the underlying tone remained risk-off even where headline indices diverged.
European indices were mixed-to-negative on 24 September: France's CAC 40 slipped 0.3% and Germany's DAX declined 0.2% as Brent crude held above the $100/barrel mark, while London's FTSE 100 bucked the trend with a marginal 0.1% gain. Investors were simultaneously weighing US interest-rate expectations and the Trump-Xi meeting in Washington. On balance, continental Europe (DAX, CAC) closed in the red in line with the negative global tone the Desk had flagged, while the FTSE's marginal outperformance mirrors the pattern seen in the prior session and reflects its heavier weighting toward energy and commodity majors, which benefit directly from firmer crude prices.
Crude extended its September advance on 24 September: WTI settled up 2.7% at $94.61/barrel (desk feed shows $94.76 intraday) and Brent gained 3.4% to close at $106.60/barrel, with Brent briefly spiking to $108.23 intraday after Iran-aligned Houthi forces fired a barrage of missiles at Saudi Arabia's Red Sea export hub of Yanbu, which Saudi air defences intercepted. Brent is up more than 17% and WTI more than 10% for the month of September alone. Prices later pulled back from the session's highs after a senior Iranian official indicated to Reuters that Tehran could allow phased navigation through the Strait of Hormuz in exchange for the US easing its naval blockade — an echo of the June memorandum of understanding that had previously collapsed back into fighting. JPMorgan estimates total Middle East oil flows are still running near 17 million barrels/day, over 70% of the 2025 average, underlining that the corridor remains partially, not fully, disrupted.
Aviation Sanctions & Escalation Risk
The US Treasury has sanctioned all of Iran's remaining active airlines (27 carriers designated on 8 September) under "Operation Economic Outcast," and from 23 September has extended secondary sanctions to any global company continuing to service Iranian carriers. The first visible impact landed on 24 September: the UAE, Oman, Georgia, Azerbaijan and Baghdad all suspended flights by Iranian airlines. Iran's international aviation capacity was already roughly 49% below year-ago levels even before this latest round. Combined with the existing US naval blockade of Iran's southern ports and disrupted overland routes, the aviation clampdown further tightens Iran's economic isolation and raises the risk of a retaliatory escalation (e.g., renewed harassment of Gulf shipping or a hardening of Tehran's stance on Hormuz transit), which the Desk views as the key upside risk to crude prices into the near term.
Credible Forecast on Oil Prices
The US Energy Information Administration's September 2026 Short-Term Energy Outlook (STEO) — prepared independently of political direction and widely regarded as the most credible near-term US government forecast
— assumes Middle East production gradually rises as Hormuz flows and alternative routes increase, but that some export constraints persist through year-end, keeping regional output below pre-conflict levels until 2Q27. On
this basis, the EIA forecasts Brent to average around $90/barrel in 2H26, easing to an average of $74/barrel in 2027 as production and inventories normalise. This sits below the current spot of ~$106.6/barrel, implying the market is currently pricing a geopolitical risk premium above the EIA's base case — a premium that could unwind quickly on any credible de-escalation news (bearish for crude, mildly supportive for Nifty via lower imported-inflation risk), or extend further if the aviation sanctions provoke direct retaliation (bullish for crude, negative for Nifty).
Impact on Nifty 50: at $94-107/barrel, India's net oil-import bill and current-account/inflation arithmetic both come under renewed pressure, a headwind for rate-sensitive and import-heavy sectors (paints, tyres, aviation, oil-marketing companies) and a tailwind for upstream energy names. Sustained crude strength alongside FII selling is a compounding negative for the index in the near term.
On the daily chart, the decline from the cycle high (~26,400, turn of Dec25/Jan26) into the 22,468.86 swing low has been unfolding as a larger-degree A-B-C correction. The subsequent recovery phase has been tracked on the desk template as a five-legged A-B-C-D-E contracting/expanding triangle, interpreted as the intermediate Wave B of that larger correction: leg (A) topped near the April/May highs, (B) based out near the June lows, (C) rallied into the August top, (D) carried price back down to the 23,046-23,063 zone — precisely where the index closed on 24 September — and the terminal leg (E) is the segment currently in focus.
Working count: fractal wave (e) of the a-b-c-d-e triangle appears to be concluding, or is very close to conclusion, in the 23,300 – 23,550 resistance shelf that has capped the last few sessions. With wave (e)/Wave-B effectively complete, the larger-degree Wave C of the primary correction should now be in motion. A confirmed break of the 22,950-22,800 shelf would validate this count and project the Wave-C objective below 22,800, with 22,600 as the first meaningful Fibonacci/structural support test for the current leg; a decisive failure there opens scope toward the 22,468 swing low.
Time-Cycle Corroboration
Classical Elliott-wave practice (and prior large-degree domestic index studies, e.g. the BSE Sensex 1994-97 B-wave expanding-triangle case study) shows that the (A) and (E) legs of a triangle frequently share a Fibonacci time relationship in addition to a price relationship — i.e., the duration of the terminal (e) leg tends to echo a Fibonacci fraction (0.382/0.618/1.0/1.618x) of the (A) leg's duration rather than running indefinitely. On the current chart, leg (A) spanned roughly 4-5 weeks (April into May); applying the same Fibonacci time-symmetry to leg (E) suggests the terminal advance is due for time-based exhaustion within a similar or 0.618x window from its own base — consistent with price already stalling in the current resistance band. This time-cycle read reinforces the price-based case that Wave B/leg (E) is late-stage, and that the balance of probability now favours the market rolling into the corrective Wave C over the sessions ahead rather than extending the triangle further. As with all wave-time studies, this is a probabilistic overlay, not a mechanical timing signal, and should be used alongside the OI/PCR and flow triggers discussed above.
Flows: FII cash selling (■5,027 cr) and heavy FII short build-up across both futures (-11,209 contracts) and options (-2,05,985 contracts) are unambiguously bearish; DII cash buying (■4,301 cr) is cushioning but not offsetting the move.
Options positioning: PCR at 0.73 with disproportionate put unwinding (-22.66L vs -1.62L in calls) signals thin conviction among option writers to defend lower strikes; 23,000/22,950 is immediate support, 23,200/23,300 is immediate resistance.
Global cues: US markets closed broadly lower (Nasdaq's late bounce is narrow/mega-cap-led and not a breadth-confirmed reversal); Europe closed mixed-to-negative (DAX/CAC down, FTSE marginally up); CBOE VIX up ~3.23%, India VIX up to 12.69 — both pointing to rising, not falling, hedging demand.
Crude/geopolitics: WTI near $94.6-94.8 and Brent above $106 on fresh Iran-aviation sanctions and Houthi-Saudi missile exchange keep imported-inflation and current-account risk elevated for India; the EIA's own $90/bbl 2H26 base case implies the current risk premium could unwind on de-escalation headlines, but the Desk treats the aviation-sanctions escalation path as the more immediate risk into the next 24-48 hours.
Elliott wave: Wave (e) of the A-B-C-D-E triangle (Wave B) looks complete or near-complete on both price and time-cycle grounds; the larger degree Wave C correction is assessed to be in motion, targeting a move beyond 22,800 toward the ~22,600 support shelf.
Sources
Desk OI/volume/volatility workbook (FII/DII/Pro futures & options OI, cash flows) and option-chain, daily-chart and FII-DII screenshots as of 24 Sep 2026 close; Reuters/CNBC (oil, US markets, Hormuz talks, Houthi-Saudi strike, 24 Sep 2026); Al Jazeera (US aviation sanctions on Iran, 8 & 23-24 Sep 2026); Trading Economics / AdvFN (European markets, 24 Sep 2026); Yahoo Finance / Bloomberg (US markets live blog, 24 Sep 2026); U.S. Energy Information Administration, Short-Term Energy Outlook, September 2026 (Brent price forecast).
Disclaimer: This note is prepared for internal research and educational discussion by the Derivative Desk, indirecttaxindia.in, based on publicly available open-interest, volume, volatility and news-flow data as of the stated date/time. It does not constitute investment advice, a recommendation, or an offer/solicitation to buy or sell any security or derivative contract. Elliott-wave counts, support/resistance levels and probable ranges are analytical opinions subject to revision without notice and carry inherent uncertainty; past open-interest or price behaviour is not indicative of future results. Readers/clients should independently verify all data and consult their own risk/compliance framework before taking any trading or investment decision. Geopolitical and macro developments (Iran-US conflict, crude oil, global central-bank action) can change materially and rapidly, invalidating the views expressed herein without prior notice.
Anish Jagdish Parashar Derivative Desk Head indirecttaxindia.in
