July 13, 2025
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Derivatives Analysis by SAMCO Securities for 14 July 2025
by Dhuhpesh Dhameja, Derivatives Research Analyst, SAMCO Securities
Heavyweight IT drags Nifty; breakdown below 25,300 flips support to resistance
Nifty stayed under consistent pressure throughout the session as disappointing results from heavyweight IT TCS dampened market sentiment. The index failed to stage any notable rebound from lower levels, ultimately closing below immediate support levels, reinforcing the ongoing bearish tone. Broader market indices, including midcaps and microcaps, also ended in the red, with the majority of stocks exhibiting notable weakness. Technically, the index remains firmly in a bearish trajectory, with weakened support zones hinting at further downside risks. Nifty closed 205.40 points lower at 25,149.85, breaching its previous week’s low.
Resistance levels have now shifted downward, while selling pressure continues to mount at higher zones. The index also ended below its 20-day EMA, a negative signal that suggests further bearish continuation if sustained. On the weekly chart, the index posted a negative close with a bearish structure, pointing to the likelihood of continued correction. Structurally, market breadth remains weak, with little conviction from bulls. The former support zone at 25,300 has now turned into resistance, and a follow-through breakdown below today’s low of 25,129 could further deteriorate the technical setup. Conversely, only a sustained move above 25,350 would attract buyers, marking this zone as a key resistance for any potential recovery.
Adding to the cautious undertone, Foreign Portfolio Investors (FPIs) have been consistently building short positions in index futures, reflecting institutional scepticism. Unless there is a noticeable shift via short covering or fresh long build-up by FPIs, upside momentum will likely remain capped.
Derivatives Snapshot:
The derivatives setup continues to reflect a firm bearish undertone. Call writers have aggressively built positions at higher strikes, particularly at 25,500, which holds the highest open interest at 1.12 crore contracts, making it a strong resistance barrier. On the other hand, put writers appear hesitant around current levels, signalling limited confidence in near-term upside. Notably, the 25,000 put strike has seen substantial open interest build-up (80.10 lakh contracts), making it a critical support zone. The Put-Call Ratio (PCR) has declined further to 0.55 from 0.69, highlighting a rise in call writing and growing bearish sentiment. Meanwhile, Max Pain has slightly shifted to 25,250, suggesting the expiry point where the most options may expire worthless, anchoring the index in its current trading band.
Volatility Check:
Despite the sharp decline in the index, India VIX remained relatively subdued, edging up by just 1.24% to settle at 11.81—still well below the psychological threshold of 15. This suggests that while selling pressure persists, the sense of panicky among market participants seems to be lacking. The low volatility environment also reflects indecision, favouring a gradual downside move rather than erratic swings.
Market Outlook:
Nifty has breached key support levels, forming a weakening structure on both daily and weekly charts. With significant short positions built at higher levels and resistance zones shifting lower, the bias remains firmly tilted toward the downside. Strong call writing activity combined with reluctant put writers indicates prevailing bearish control, with 25,000 likely to be tested in the near term. The broader trend stays negative, with the Relative Strength Index (RSI) slipping below the neutral 50 mark, indicating fading bullish momentum. For any reversal of sentiment or positive sentiment to prevail, the index must convincingly move above 25,350. Until then, sellers are expected to maintain dominance. With earnings season expected to pick up in the coming sessions, —especially from IT heavyweights—upcoming results will be crucial in determining the short-term trajectory of the market.
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