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Derivatives Analysis by SAMCO Securities

Derivatives Analysis by SAMCO Securities

by Dhuhpesh Dhameja, Derivatives Research Analyst, SAMCO Securities

🕗 Last Update: 7 January 2026, 8.00 AM

Orderly Profit Booking Keeps Nifty Range-Bound, Broader Trend Unshaken

Market Overview

Nifty index continues to undergo a phase of orderly profit booking, marked by muted price momentum rather than any structural weakness. The benchmark remained confined within an upward-sloping channel, currently hovering near its lower band—an area that has emerged as a key technical support.

Wednesday’s session was largely dull and range-bound, though the index staged a swift recovery from intraday lows, underscoring buying interest at lower levels. Despite this rebound, the Nifty slipped 37.95 points to close at 26,140.75, reinforcing the view that the ongoing move reflects healthy consolidation instead of trend fatigue.

 Technical View

From a technical standpoint, the index has struggled to sustain higher levels over the past three sessions, registering lower closes below the previous day’s highs. This price behavior signals a re-entry into consolidation, further highlighted by the formation of two consecutive indecision candles on the daily chart.

That said, the broader setup remains constructive. Prices continue to trade within the rising channel, and importantly, the index is holding comfortably above its 20-day Exponential Moving Average (DEMA), which is acting as immediate support. This reinforces the underlying bullish bias, indicating that declines are being actively absorbed by buyers.

The 26,000–26,100 zone has now emerged as a critical make-or-break region. Previously a resistance area, it has turned into a strong support base. As long as the index sustains above this band, the likelihood of follow-through buying remains high, with buyers firmly in control of key levels.

Momentum indicators also point to consolidation. The Relative Strength Index (RSI) is hovering just above the 50 mark, suggesting a temporary pause before the next directional move. Holding above the psychological 26,000 level keeps the buy-on-dips strategy relevant. A decisive breakout above 26,350–26,370 could open the door for fresh highs near 26,500.

 Derivatives Snapshot

Derivatives setup aligns with the prevailing sideways-to-positive bias. Call writers have added fresh positions at at-the-money and nearby strikes, effectively capping near-term upside. Meanwhile, put writers continue to maintain sizable positions at lower strikes, indicating expectations of range-bound trade rather than a sharp directional move.

A notable open interest build-up of nearly 68.71 lakh contracts at the 26,100 put strike firmly establishes this level as immediate support. On the flip side, the addition of around 84.78 lakh call contracts at the 26,200 strike has emerged as a key near-term resistance.

The Put-Call Ratio (PCR) has remained largely unchanged at 0.77 (from 0.73), reflecting heightened caution and increased seller presence at higher levels.

 Market Outlook

Nifty’s broader trend remains intact, with prices holding above the 20-DEMA, keeping the overall bias positive. The index’s inability to sustain at elevated levels points toward healthy profit booking, not exhaustion of the prevailing uptrend.

The ongoing higher-low structure and upward channel formation continue to signal strong underlying demand, as declines are being swiftly absorbed near support zones—highlighting sustained investor confidence.

The 26,200–26,100 band is now crucial for maintaining short-term stability. Continued participation from put writers around at-the-money strikes underscores optimism that the broader trend remains supportive. A sustained move above 26,370 could trigger short covering, propelling the index toward fresh record highs near 26,500.

Conversely, any dips toward the 26,000 region are likely to attract buying interest, keeping the buy-on-dips approach firmly in play over the near term.

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