With a monthly expiry looming and key EMAs in play, analysts warn of sharp moves.

Indian markets failed to hold their intraday gains on Tuesday, but still ended in the green with the Nifty holding the psychological 25,000 mark. Benchmarks are expected to open on a positive note on Wednesday, tracking strong global cues after the truce between Israel and Iran came into effect. 

Analyst Bharat Sharma of Stockace Financial Services highlighted that the Nifty monthly options will expire on Thursday, and the market is expected to remain volatile. The overall outlook seems positive, due to the breach of the BOX level, despite the index closing below 25,100 on Tuesday. 

Sharma sees 25,000, which aligns with the 100-day Exponential Moving Average (EMA) on a 15-minute timeframe,  as the immediate support for Wednesday’s trade. 

If the Nifty falls below this, he sees support at the 200-day EMA of 24,950, and it may attempt to push the index back above 25,000. However, if that fails, we could see a brutal fall towards 24,900-24,830-24,750, respectively.

Sharma noted that as long as the index stays above 25,000, the bias should remain positive, with expectations of a renewed attempt to breach 25,100, followed by targets of 25,180-25,250-25,300, and higher. 

He cautioned that the options premium remains moderate to high, indicating that the market expects further movement during this expiry. Over the next two days, as monthly options contracts are positioned for expiry, we are likely to see speculations and sentiment shifts for July. Sharma advises traders to maintain caution and adhere to key levels.

Analyst Ashish Kyal echoed a similar sentiment. He noted that if the Nifty index manages to close above 25,130 on a 15-minute chart, it could signal an opportunity to initiate long positions, with potential targets at 25,200-25,240 levels.

On the downside, Kyal pegged support at 24,930; if this fails to hold, it can lead to a short-term selling pressure and open the path to lower targets. He emphasized that a close above 25,300 is necessary to generate strong momentum for the Nifty. 

Analyst Varunkumar Patel highlighted that foreign institutional investors (FIIs) sold stocks worth over ₹5,200 crore in the cash market on Tuesday while increasing their net short positions in index futures and options. He added that with geopolitical tensions easing, market focus has shifted to FII liquidity, which is currently negative. As a result, he expects the Nifty to trade within the 24,500–25,100 range.

The Nifty index has gained 5% year-to-date (YTD)

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