Nifty slides ahead of RBI MPC Outcome, key 24,500 support under test as bears tighten grip

Mumbai: Nifty index has been stuck in a narrow range for the last three sessions, with price action turning increasingly volatile and lacking a clear directional bias. Despite short-term oversold conditions on lower timeframes triggering minor intraday pullbacks, the index has failed to deliver a decisive close to inspire confidence. On Tuesday, Nifty ended on a subdued note, shedding 73.20 points to settle at 24,649.55 — hovering just above the critical support of 24,500.

With the Reserve Bank of India(RBI)’s monetary policy decision scheduled for Wednesday, traders remained on the edge, as the outcome is expected to shape market direction for the coming week.

Technical View:

The index continues to trade within a consolidation band of 24,500–24,750. A breakout on either side of this range will be crucial in determining the next leg of momentum. Until then, the index is likely to witness choppy and sideways movement. On the downside, the 100-day exponential moving average (100-DEMA) near 24,590 has so far acted as a dependable support level. A firm breach below the 24,535–24,500 zone may open the gates for further downside toward 24,300–24,250. On the upside, the Nifty remains below its short-term moving averages, with the 10-DEMA and 20-DEMA placed at 24,800 and 24,900, respectively, acting as immediate resistance levels.

Unless the index reclaims these levels convincingly, any rebound is likely to face supply pressure. The Relative Strength Index (RSI) hovers near the 40 mark, reflecting persistent bearish momentum. The structure remains weak, and any pullback may present a fresh opportunity to initiate short positions rather than a reason to chase the rally.

Derivatives Snapshot:

The F&O data reflects a defensive and cautious undertone. Significant call writing has emerged at the 25,000 strike, where open interest has surged to 1.33 crore contracts, reinforcing a stiff resistance zone. On the other hand, the highest put open interest is observed at the 24,600 strike, with 97.30 lakh contracts, positioning it as the immediate support. Interestingly, put writers have started shifting to lower strikes, indicating weakening bullish conviction.

Simultaneously, aggressive call writing at elevated levels points to persistent overhead supply. The Put-Call Ratio (PCR) has dropped sharply from 0.85 to 0.72, signaling growing bearish sentiment and dominance of call writers.

Volatility Check:

India VIX declined by 2.13% to close at 11.97. Despite the looming macro event, volatility remains well-anchored near the 11 level, indicating that traders are not anticipating a dramatic selloff. This suggests the market is more inclined toward consolidation rather than a steep correction — at least in the near term.

Market Outlook:

Nifty’s inability to stage a convincing bounce or reclaim key resistance levels continues to reflect underlying weakness. Buyer participation remains low, while call writers dominate at higher levels, keeping upside firmly capped. Unless Foreign Portfolio Investors (FPIs) begin covering their short positions in the futures market and re-enter the cash segment aggressively, rallies are likely to remain short-lived. In the current environment, a sell-on-rise strategy appears more prudent than adopting a buy-the-dip approach.