Nifty consolidation persists as expiry creates range-bound trade amid Bank Nifty strength

The Nifty index ended its monthly expiry weak, breaking a three‑month winning streak for traders. On Tuesday, the benchmark moved within a tight range and finally closed almost flat. Nifty settled at 25,938.85, down 3.25 points, reflecting mild profit‑booking. Bank Nifty, however, managed a positive close, while India VIX stayed low, signalling limited fear despite the expiry.

During the session, Bank Nifty showed intraday strength from lower zones but lacked strong follow‑through buying. The index still finished above the previous two sessions’ highs, which supported sentiment. Bank Nifty closed at 59,171.25, up 238.90 points. India VIX inched up 0.44 percent to 9.67, keeping volatility within a subdued band that often signals range‑bound trade.

Nifty traders are dealing with a market where clear direction is missing and short swings dominate trade. "Nifty remains devoid of a clear directional bias and continues to trade firmly within its broader range. Declines are consistently being absorbed near support zones, preventing sharp corrections, while rallies are facing rejection amid the prevailing lower-high structure. This ongoing tug of war underscores a prolonged consolidation phase, where buyers are defending key supports but sellers are effectively capping upside near the 26,200-26,250 resistance band. On the downside, the 25,800-25,700 zone has emerged as a crucial demand area and will be pivotal in maintaining short-term stability," said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.

The options market reflects this indecision around the Nifty outlook today, with writers active on both sides. "Aggressive option writing near at-the-money strikes on both sides reflects heightened uncertainty and a lack of conviction regarding the next decisive move. A sustained breakout and close above 26,250 could trigger short covering, potentially propelling the index towards fresh all-time highs near the 26,400 zone. Conversely, any dips towards 25,700 are likely to attract buying interest, keeping the broader range-bound structure intact in the near term," he further added.

The Bank Nifty outlook today also shows consolidation, with price movement tethered between firm supports and strong resistance. "Nifty Bank continues to trade without a clear directional bias through the December series, keeping the near-term structure delicate. The broader outlook remains cautious amid an extended consolidation phase, with sellers firmly guarding the 59,500-59,700 resistance band. On the downside, the 58,700-58,800 region has emerged as a crucial demand zone and will be vital for preserving short-term stability," Dhupesh Dhameja commented.

Position data on Bank Nifty options further supports this sideways bias for the Bank Nifty outlook today. "The heavy concentration of call writing near at-the-money strikes, coupled with the gradual shifting of put positions to lower levels, reinforces the prevailing sideways bias. A decisive and sustained move above 59,500 could reignite bullish momentum and open the door toward the 60,100 zone. Conversely, a breach below 58,800 may weaken the structure, trigger fresh selling pressure, and drag the index toward the 58,500 level-thereby prolonging the ongoing consolidation phase," the analyst further recommended.

Stocks to buy today and technical trade ideas

On Wednesday, December 31, the Nifty formed a classic doji candle on the daily chart. This pattern often signals hesitation after a prior rebound. Against this backdrop, technical analyst Riyank Arora of Mehta Equities Ltd. highlighted two stocks to buy today for positional traders, based on supportive technical structures and improving momentum on the charts.

Riyank Arora’s stocks to buy today include NMDC, which has been respecting support near ₹80 and building a base. The recommended levels and targets are detailed below. Hero MotoCorp is the second pick, with prices holding above key moving averages and momentum readings turning favourable after a phase of consolidation.

Key index and volatility data are summarised below for quick reference.

Index / Indicator	Level / Change
Nifty Close	25,938.85 (-3.25 points)
Bank Nifty Close	59,171.25 (+238.90 points)
India VIX	9.67 (+0.44%)

The two stocks to buy today as per the analyst’s view are presented in the table for clarity.

Stock	Recommendation	CMP (₹)	Stop-Loss (₹)	Targets (₹)
NMDC	Buy	83.41	80	88 / 92
Hero MotoCorp	Buy	5,711	5,550	5,900 / 6,050

For NMDC, Arora notes the stock is trading above its key demand area around ₹80, showing buying interest. The price pattern indicates a consolidation base, while the RSI is turning higher, hinting at renewed strength. A move above ₹85 could start another leg towards ₹88 and ₹92, with traders advised to keep a stop‑loss at ₹80 on long positions.

On Hero MotoCorp, the analyst observes that the trend structure remains positive after a healthy pause on the charts. The share price is sustaining above important averages, and momentum indicators stay supportive. A steady close above ₹5,750 could lead to price objectives at ₹5,900 and ₹6,050. The suggested protective stop‑loss for this setup is ₹5,550 for traders following these levels.

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