Put writers dig in as bulls eye 25,500-26,000 band

The resistance level remains at 26,000CE for a second consecutive week due to lack fresh build-up of Open Interest (OI), while the support level moved up 1,200 points to 25,200PE narrowing down the trading range for the week ahead.

The 26,000CE has highest Call OI followed by 25,400/ 25,600/ 26,500/ 25,350/ 25,300/ 25,700/ 26,100 strikes, while 26,500/ 25,350/ 25,650/ 26,200 strikes recorded reasonable addition of Call OI. Further, Call ITM strikes from 25,250 and OTM strikes in 25,550/ 25,800/ 25,950/ 26,000 strikes. The Implied Volatility (IV) fell drastically for both the OI higher bases at Call and Put strikes. Falling IVs and heavy Put OI additions signal a guarded base-building phase between 25,000–25,400.

The maximum Put OI is seen at 25,200PE followed by 25,000/ 24,500/ 25,300/ 25,150/ 24,500/ 24,000/ 24,300 strikes. Heavy Put OI build-up is visible at 25,300/ 25,100/ 25,000/ 25,200/ 24,700/ 24,000 strikes, while 25,300/ 25,200/ 25,250/ 25,150/ 25,400 strikes hold heavy addition of Put OI.

Heavy Put positioning around 25,000–25,300 and subdued Calls show the market locked in a consolidation mode.

Dhirender Singh Bisht, associate vice-president (technical research-equity) at SMC Global Securities Ltd, said: “In the derivatives segment, the highest Call Open Interest for the Nifty was observed at the 25,500 and 25,400 strike levels, while notable Put Open Interest stood at the 24,200 and 25,100 strikes. For the Bank Nifty, significant Call Open Interest was concentrated at the 57,000 strike, with substantial Put Open Interest seen at the 56,000 strike.”

“The Indian market witnessed an upward movement, with broader indices closing in positive territory. The Nifty surged over 1.5 per cent, while the Bank Nifty outperformed, closing with gains of approximately 1.8 per cent on weekly chart.

Key factors driving the rally included anticipation of upcoming IT earnings, buying interest in metal stocks, and optimism surrounding the easing of lending norms, which particularly supported gains in banking, especially PSU banks. On the sectoral front, the major gainers were capital markets, IT, and healthcare, whereas media, defense, and FMCG sectors ended the week in the red,” added Bisht.

For the week ended October 10, 2025, BSE Sensex closed at 82,500.82 points, a net fall of 1,293.65 points or 1.59 per cent, from the previous week’s (October 3) closing of 81,207.17 points. NSE Nifty too declined by 391.10 points or 1.57 per cent to 25,285.35 points from 24,894.25 points a week ago.

Bisht forecasts: “On the daily chart, the Nifty is trading within an upward channel, indicating sustained upside momentum. It is also trading above its long-term exponential moving average, indicating the bullish trend.

Immediate support is placed at 24,800; as long as the index remains above this level, the bullish view is expected to hold, and the market can be approached with a ‘buy on dips’ strategy. On the upside, resistance is placed in the 25,500–25,600 zone.”

The NSE Nifty defended 25,000 level and closed the day near highs. Nifty may continue its positive bias and move towards 25,500. On the downside, aggressive Put writing was seen in ATM and OTM strikes indicating support at lower levels. Hence, aggressive traders can use dips to create fresh long position with 25,000 as important support levels, according to ICICIdirect.com.

However, our bias remains positive as long as Nifty is trading above its crucial support levels of 24,800 level. On higher side, Nifty may extend its gains towards September highs of 25,500 level.

India VIX fell 0.17 per cent to 10.10 level. India VIX inched up after hovering lower for last few sessions. It reached 10 level after the RBI MPC outcome. The current levels of India VIX is significantly lower and it may move higher ahead of quarterly results.

FIIs in the F&O space, after a recovery seen last week, lowered their net shorts to 1,85,000 from the recent highs of 1,96,000 contracts, which is still at higher level considering recent the market move, according to the ICICIdirect data. FIIs took major long positions in Put options, while the foreign funds remained net long in Put options suggesting their ongoing negative bias in the equities.

“Implied Volatility for Nifty’s Call options settled at 8.74 per cent, while Put options concluded at 9.91 per cent. The India VIX, a key indicator of market volatility, concluded the week at 10.12 per cent. The Put-Call Ratio of Open Interest (PCR OI) stood at 0.99 for the week,” remarked Bisht.

Net short positions ease, yet heavy Put longs reveal FIIs’ guarded stance as markets tread uncertain terrain. Volatility dries up as Nifty traders tighten range.

Though FIIs trimmed shorts, the caution still rules derivatives street. Despite paring bearish bets, foreign investors remain net long on Puts, signalling lingering skepticism on equities’ near-term trajectory.

Bank Nifty

Bank Nifty NSE’s banking index closed the week at 56,609.75 points, a 1,020.50 or 1.80 per cent lower from the previous week’s closing of 55,589.25 points.