03 July 2025 l Nifty 50 Technical Analysis: RSI Divergence and Profit Booking Signal |
Published by Vie Capital | 2 July 2025
Introduction
The Nifty 50 Index saw mild profit booking today after a sharp breakout last week, closing at 25,453.40 with a drop of 88.40 points (-0.35%). The session showed early strength but reversed from highs, indicating cautious trader sentiment amid expiry week adjustments. In this analysis, we’ll review the latest technical indicators, moving averages, RSI patterns, option chain cues, and an expiry trade plan for tomorrow’s session.
Nifty 50 Daily Chart Analysis
- The price formed a bearish pin bar (inverted hammer) at the top of the recent rally, indicating exhaustion.
- Nifty is still in a clear higher high, higher low pattern, preserving its medium-term bullish structure.
- Volume dropped on this decline, showing lack of aggressive selling.
Moving Averages Status:
- 20-Day SMA: 24,797.71 (Immediate support)
- 50-Day SMA: 24,089.48 (Medium support)
- 100-Day SMA: 23,899.28
- 200-Day SMA: 23,250 (Major long-term support)
RSI and Divergence Signal
- RSI (14): 61.34 — slipping from recent highs
- Bearish divergence visible since April: price making new highs, RSI making lower highs
- This suggests momentum fatigue and warns of possible short-term pullback
Option Chain Inference
- Max Call Open Interest: 25,800 and 26,000 CE (strong resistance)
- Max Put Open Interest: 25,300 and 25,000 PE (support levels)
- Put Call Ratio (PCR): estimated 1.20–1.30 — mildly bullish but cooling off
- Option writers defending 25,300 on dips and capping 26,000 on rallies
Will Open Interest Shift Downward on next week Expiry?
This is a vital question for expiry traders. Based on the latest option chain and price action, there's a high probability of a downward shift in Open Interest (OI) if certain levels break. Let’s decode it:
- Max Pain stands at 25,450, while heavy Call writing is concentrated at 25,500 and 25,600 CE, creating expiry pressure overhead.
- IV (Implied Volatility) on lower strikes (25,000, 24,900 PE) remains elevated, showing that traders are still hedging against a possible dip.
- Call writers are likely to defend 25,500–25,600. If Nifty struggles near these zones and starts slipping below 25,450–25,430, expect fresh Call writing at 25,400 and 25,300 CE, pulling OI lower and compressing expiry range.
What to Watch Tomorrow:
| Indicator | Trigger for OI Shift Down | Confirmation |
|---|---|---|
| Nifty spot drops below 25,400 | Expiry range likely moves toward 25,300 | Check CE unwinding at 25,500 |
| VIX spikes during session | Increased volatility hints at possible intraday swing | Watch for rising CE and PE IV |
| CE build-up at 25,400 and 25,300 | Indicates expiry pressure shifting lower | PCR falling toward 1.00 |
Unless Nifty decisively clears 25,500 with visible CE unwinding, expiry pressure remains heavy overhead. A dip toward 25,300–25,450 remains a high-probability scenario as per current Open Interest data and Max Pain positioning.
Nifty Technical Summary Table
| Indicator | Value / Signal |
|---|---|
| Price Action | Bearish pin bar at top |
| RSI (14) | 61.34, Bearish divergence |
| 20 SMA | 24,797.71 — Support |
| 50 SMA | 24,089.48 — Support |
| Max Call OI | 25,800 & 26,000 CE |
| Max Put OI | 25,300 & 25,000 PE |
| PCR (Est.) | 1.20–1.30 |
| Trend Bias | Medium-term bullish, short-term profit booking |
Expiry Day Trade Plan for 3 July 2025
| Time | Action | Target | Stop-loss |
|---|---|---|---|
| 9:15–11:00 AM | Buy near 25,300–25,330 | 25,500–25,580 | 25,250 |
| 11:00–1:15 PM | Wait and watch (IV & OI shifts) | - | - |
| 1:30 PM onwards | Buy above 25,600 if CE unwinds | 25,700 | 25,560 |
| Option Writing (rangebound) | Sell 25,300 PE & 26,000 CE | Expiry erosion | Reverse if breakout |
Caution Points
- Watch for sharp VIX moves around 1:30 PM.
- Avoid chasing longs above 25,650 without clear CE unwinding.
- Use tight stop-losses as expiry volatility can trigger quick reversals.
Conclusion
Though Nifty remains in a medium-term bullish structure, today’s price action hints at short-term fatigue. RSI divergence and bearish pin bar warn of a possible mild correction or sideways movement. Option data suggests expiry range of 25,300–25,700. Trade cautiously and follow the expiry trade plan above for disciplined entries.
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