21 July 2025 : Nifty Outlook Post 25200 Breakdown – Technical and Derivative Analysis

 Key Technical Zones on Nifty

• Immediate Resistance: 24,950–25,000 zone (previous support turned resistance)
• Breakdown Confirmation: Sustained trade below 25200 with high volume rejection
• Support Levels: 24,800 – psychological and option support, next 24,400 (June base)
• Major Support: 23,800, derived from Fibonacci and long-term trendline confluence

 Fibonacci & Moving Averages Confluence

Nifty has violated the 0.618 Fibonacci retracement level drawn from 21,756 to 25,670, which was around 25,300–25,400. Price has now tested the 0.786 level at 24,833, which held briefly. On the daily chart, the 50-DMA lies around 24,900, and the 100-DMA is close to 24,400, creating a key moving average band.

RSI Divergence Insights

Bearish divergence is clearly visible on both the daily and 1-hour charts, where the price made higher highs, but the RSI created lower highs. This indicated waning momentum even before the fall began from 25,670. RSI is now at 43 on the daily chart, just above the oversold region, suggesting a possible pause or bounce around 24,800–24,900.

 Option Chain Analysis – 24 July Expiry

• Max Call OI: 25,000 CE and 25,100 CE → Strong resistance zone
• Max Put OI: 24,700 PE and 24,800 PE → Short-term support base
• Change in OI: Call writers aggressively added at 24,900–25,000 CE strikes
• IV Range: 10.1% – 12.8%, moderately low, favoring theta-based trades

Volatility Structure & Theta Play

Implied Volatility has slightly cooled off post-breakdown. Premium erosion on both CE and PE sides signals a favourable setup for Iron Condors or Bear Call spreads. Traders expecting consolidation can deploy range-bound strategies between 24800–25100 for short-term theta capture.

 Recommended Trade Setups

• Iron Condor: Sell 24800 PE / 25100 CE, Buy 24700 PE / 25300 CE → Net Credit Play
• Bear Call Spread: Sell 25200 CE / Buy 25400 CE → Lower risk directional trade
• Put Broken Wing: Sell 24800 PE, Buy 24600 PE & 24900 CE → Protective bearish bias

 Follow for Chart-Based Nifty Updates

 Conclusion

The breakdown below 25200 confirms short-term weakness in Nifty. However, with RSI nearing a support zone and IVs remaining muted, we may see a phase of sideways action between 24800–25100. Option writers can benefit from theta decay if levels remain capped. A break below 24800 may open room for 24400 next week. Stay nimble, use charts + OI shift together, and avoid over-leveraged bias.

Author: Praveen Kumar | July 20, 2025