Indian Stock Market Navigates Choppy Waters
The Indian stock market presented a mixed and subdued picture on Tuesday, November 25, struggling to find a clear direction in a volatile trading session. This muted trend persisted even as most global markets provided largely positive signals. The benchmark Sensex traded flat, showing minimal movement, while the Nifty 50 index managed to hold above the crucial 25,900 level.
Sectoral Performance: A Tale of Two Halves
The market action revealed a distinct split in sectoral performance. Significant buying interest was observed in several key sectors, including PSU banks, pharmaceuticals, realty, metals, and auto. These sectors emerged as the leaders, pushing the indices into positive territory at times. On the flip side, selling pressure weighed heavily on the IT, media, and FMCG sectors, acting as a drag on the overall market momentum.
Drilling down to individual stocks within the Nifty 50, the top gainers for the day were Bharat Electronics, Dr Reddy’s Laboratories, State Bank of India (SBI), JSW Steel, and Hindalco Industries. Conversely, the stocks that led the losses included Adani Enterprises, Infosys, Tata Motors Passenger Vehicles, Adani Ports & SEZ, and Eicher Motors.
This session followed a weak close on the previous day, where the Nifty 50 had settled 108.65 points, or 0.42%, lower at 25,959.50. This decline formed a significant bearish candle on the daily chart, a technical indicator that often points towards underlying market weakness.
Nifty Options: Key Levels and a Bullish Strategy
In the derivatives market, analysis of open interest (OI) data provided clues about potential support and resistance zones. According to Axis Securities, the highest Nifty OI on the Call side was concentrated at the 26,100 strike, followed by 26,200. These levels are expected to act as strong resistance. On the Put side, the highest OI was at the 26,000 strike, followed by 25,700, which are likely to serve as key support levels for the index.
The brokerage further noted that the premium for the At-the-Money option was around ₹360, suggesting a probable weekly trading range between 25,600 and 26,400.
For traders with a specific outlook, Axis Securities has recommended an options strategy for contracts expiring on 2 December 2025.
Recommended Strategy: Bull Call Spread
Axis Securities has advocated for a Bull Call Spread strategy, reflecting a moderately bullish view on the Nifty. This strategy is designed to profit from a limited upside move while also capping the maximum potential loss.
A Bull Call Spread involves two simultaneous transactions: buying one lot of a lower strike call option and selling one lot of a higher strike call option, both with the same expiry date.
Strategy Details:
- Buy 1 lot of Nifty 26,000 Call at a premium between ₹185 - ₹205
- Sell 1 lot of Nifty 26,250 Call at a premium between ₹85 - ₹95
- The Break-Even Point for this strategy is 26,105
Risk-Reward Analysis:
Axis Securities outlined the potential outcomes, stating that the maximum risk for this Nifty options trading strategy is limited to ₹7,875. On the other hand, the maximum potential reward is capped at ₹10,875.
The brokerage advised traders to deploy this spread to target moderate returns while maintaining controlled risk. They also emphasized entering and exiting all legs of the strategy together and squaring off the position before the market closes on the expiry day.
Disclaimer: The views and recommendations above are those of individual analysts or broking companies, and not of Mint. Investors are advised to consult certified experts before making any investment decisions.
