Posted on March 13, 2025, by Niftynews
The NIFTY50 index is currently in consolidation mode, remaining range-bound as it tests the 22,300 support zone for the second consecutive day. Despite some weakness in the IT sector, the index has managed to absorb selling pressure and hold firm at this level. The immediate resistance remains at 22,700, and a breakout from this consolidation range could offer traders crucial directional insights for the coming days.
NIFTY50 Technical Setup: Support at 22,300, Resistance at 22,700
On March 12, 2025, the NIFTY50 started the session on a positive note but faced selling pressure as the day progressed. After dropping to the 22,300 support zone, the index staged a recovery, bouncing back by more than 100 points from the day’s low. This price action indicates support-based buying at lower levels, suggesting that 22,300 is a key support level for NIFTY50.
On the daily chart, the NIFTY50 continues to trade in a range-bound setup. The immediate support is seen around 22,200, with resistance hovering near the 21-day exponential moving average (EMA). A close above or below these levels could provide traders with the next directional move.
Intraday Range and Trendlines: Watching 22,500 Resistance
On the 15-minute chart, the NIFTY50 has been trading within a tight range between 22,300 and 22,650 for the past two trading sessions. This range-bound trading has been marked by resistance at 22,500, coinciding with a declining trendline. Traders can look for potential breakouts for a clearer trend direction:
- Bullish setup: A strong breakout above the 22,500 resistance could lead to a potential move toward 22,650. A strong candle close above the trendline would confirm this move and suggest a bullish trend.
- Bearish setup: Conversely, if NIFTY50 breaks the 22,300 support, it may indicate weakness and a possible downward move. A close below 22,300 could signal a bearish shift in the market.
Options Build-Up: Key Levels to Watch
Looking at the open interest (OI) data for the March 6 expiry, significant call OI was observed at 22,600 and 22,500, indicating resistance at these levels. On the other hand, put OI was concentrated around 22,300 and 22,000, suggesting strong support at these levels. The put-call ratio (PCR) stands at 0.8, showing a slight preference for put options.
Trading Strategies for Expiry Day
Given the current market conditions, traders can consider the following strategies based on the expiry day outlook:
Bullish Outlook: Long Call Strategy
If traders anticipate a breakout above 22,500, they may consider a long call strategy. The NIFTY50 closed at 22,470 on Wednesday, with 22,450 acting as the at-the-money (ATM) strike. Purchasing an ATM call option with a strike price of 22,450 sets the breakeven point at 22,528. If the NIFTY50 rises above this level, the trade becomes profitable.
Bearish Outlook: Long Put Strategy
For traders who expect NIFTY50 to break the 22,300 support zone and move lower, a long put strategy could be appropriate. By purchasing an ATM put option with a strike price of 22,450, the breakeven is at 22,396, meaning the trade will be profitable if NIFTY50 drops more than 0.3%.
Range-Bound Outlook: Iron Condor Strategy
For traders who expect range-bound trading, they can consider an iron condor strategy. This strategy benefits if the NIFTY50 stays within the 22,600 call and 22,300 put strike prices. Maximum profits are realized when the index stays within the defined range, which aligns with the current open interest setup.
Conclusion: NIFTY50 Outlook for Expiry Day
In conclusion, the NIFTY50 index is currently in a range-bound phase, with support at 22,300 and resistance at 22,500. Traders can capitalize on a breakout above the 22,500 resistance for potential bullish gains or consider a bearish outlook if the index breaks 22,300. Options strategies like long calls, long puts, and iron condors offer flexibility based on your market outlook.
