Can Nifty Extend Gains Above 25,500?
About the Current Market Setup
Nifty witnessed a strong intraday recovery after a negative opening on 16 February 2026 and closed with a gain of 0.83 percent. The recovery from lower levels reflects buying interest at support zones and reinforces the evolving short-term structure.
Institutional positioning and options data now provide deeper insight into whether this move is merely a relief rally or the beginning of a stronger upward continuation.
The broader tone suggests a cautious but improving sentiment, especially as derivatives data begins to align with price behaviour.
Price action alone tells only half the story. The real conviction in markets is visible through open interest shifts, PCR movement and strike concentration.
Key Option Chain Signals
🔹 Significant open interest at 26,000 Call.
🔹 Strong Put writing observed at 25,500.
🔹 Call unwinding visible at higher strikes.
🔹 Put-Call Ratio rises to 1.08.
🔹 Max Pain positioned at 25,650.
🔹 VWAP range projected between 25,505 and 25,745.
Put writing combined with Call unwinding typically indicates that market participants are building support below and removing overhead pressure. This configuration leans toward a bullish undertone rather than aggressive breakout momentum.
For traders aligning option positioning with structured derivatives execution, explore Nifty Option Setup frameworks.
Market Internals Snapshot
| Indicator | Latest Data | Interpretation |
|---|---|---|
| Nifty Close | 25,682.75 | Positive bias |
| PCR | 1.08 | Bullish undertone |
| Max Pain | 25,650 | Magnet zone |
| FII Cash Flow | -₹972 crore | Mild selling |
| DII Cash Flow | +₹1,666 crore | Domestic support |
Despite FIIs being net sellers in cash, derivatives positioning in index futures shows selective long additions, particularly in Bank Nifty contracts. This suggests hedged optimism rather than aggressive risk-off behaviour.
Strengths🔹 Strong Put base at 25,500. 🔹 PCR above 1 indicating demand support. 🔹 Intraday recovery confirms buying interest. |
Weaknesses🔹 26,000 Call still heavy resistance. 🔹 FIIs net sellers in cash. 🔹 Midcaps underperforming large caps. |
The technical posture now hinges on whether Nifty sustains above the 25,500 zone. A breakdown below this strike may weaken the bullish configuration, while sustained trade above 25,745 could invite momentum expansion.
Opportunities🔹 Short covering above 25,745. 🔹 Banking sector momentum. 🔹 Expiry-driven volatility expansion. |
Threats🔹 Global macro volatility. 🔹 Resistance at 26,000 Call. 🔹 Sudden FII derivative unwind. |
Sector performance indicates PSU Banks and Realty leading, while Auto and Media lag. Leadership rotation toward rate-sensitive sectors may support near-term upside if macro cues remain stable.
Valuation and trading view
As long as Nifty trades above 25,500, the bullish undertone remains intact. The Max Pain zone at 25,650 may act as a consolidation magnet before directional expansion.
Traders should watch the 25,745 upper VWAP band for breakout validation and 25,500 for structural support integrity.
For refined volatility planning and index hedging models, access BankNifty Option Setup.
Derivative Pro & Nifty Expert Gulshan Khera, CFP® advises combining strike-based analysis with disciplined risk management rather than chasing momentum spikes. For structured daily index insights, visit Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Nifty and Derivatives
What does PCR above 1 indicate?
Is 26,000 a strong resistance level?
How does Max Pain affect expiry?
What is the importance of Put writing?
How should traders use VWAP range?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
