Trade setup for 25 march; Nifty prediction, trump secondary tariffs, DII and FII both net buyer

The market has been witnessing astonishing movements on a continuous basis. It has been in a six-day streak of bullish candles, consistently closing in positive territory. The market has moved from the 22350 level to the 23800 level continuously, making tomorrow Trade setup crucial to reach the 23800 level

Each day, the market opens at a higher level, aligning with our previous analysis that it tends to close near its high. The market opened with a gap-up today, initially dipping for the first few minutes before stabilizing. After a brief cooldown, it resumed its upward momentum, forming a continuous pattern of higher highs. However, it faced sharp selling pressure from the upper levels toward the end of the session.

At one point, the market had surged nearly 80% from its low, but by the close, it retraced almost 50% of that gain. Looking at the 15-minute timeframe, the 50-day simple moving average (SMA) has acted as a strong support level. Over the past six days, and especially in the last three sessions, the market has not breached this level, reinforcing its strength.

If the market shows any signs of weakness, this 50-day SMA will be a crucial level to watch in the near term.

Also read ; Trade setup for tomorrow; Nifty prediction 23800, global market analysis, FII net buyer today

Global market analysis for Trade setup

Today, the NASDAQ surged nearly 2.5% to the upside, breaking a crucial near-term resistance level of 19950. After opening with a gap-up, the index established strong support and sustained its upward momentum throughout the session.

This rally was fueled by reports that the White House has narrowed its stance on upcoming U.S. tariffs, creating a mixed sentiment among Wall Street traders. The news introduced an element of uncertainty, leading to a complex market reaction.

The U.S. met with Ukrainian President Volodymyr Zelensky on Sunday to discuss a Black Sea ceasefire. Further talks on the matter are expected. Additionally, the U.S. is scheduled to meet with Russia in Riyadh on Monday to negotiate the Black Sea maritime ceasefire.

Last week, the U.S. also held discussions with both Ukraine and Russia, signaling an urgent push to end the three-year-long conflict.

Recently, former President Donald Trump made a new announcement regarding tariffs, referring to them as “secondary tariffs.” He stated that any country trading crude oil with Venezuela would face an additional 25% tariff as a punitive measure. This move marks an escalation in Trump’s broader economic stance, reinforcing his tough approach toward Venezuela.

Domestic Market Analysis for Trade setup

The market is witnessing a strong rally, driven by Foreign Institutional Investors (FIIs) as key risk leaders. Additionally, DII has provided support by acting as a net buyer in today’s session.

Several factors are contributing to the aggressive market movement. The market was previously in a consolidation phase, but the financial sector has now emerged as the leading force. Positive news regarding potential rate cuts, along with upcoming economic data hinting at further reductions, has strengthened sentiment in the sector.

Another key factor to note is the continuous weakening of the USD against the INR. The Indian Rupee has been strengthening for the 10th consecutive day, highlighting the significant impact of Foreign Institutional Investors (FIIs) on the currency market. The USD/INR pair has declined from 87.35 to 85.53, making Indian equities more attractive to investors.

Additionally, the Indian government bond market is also cooling down, which is a positive sign for the banking sector. This trend encourages more investment in savings and treasury instruments. Furthermore, the commodity market is responding positively, adding further strength to the overall market sentiment.

FII and DII Activity & Option chain analysis

FII and DII Activity

FIIs are currently leading the market, with retail confidence also playing a significant role in driving the momentum. Together, these factors are pushing the market to higher levels, making it a challenging period for bearish traders.

As we discussed in the previous blog, FIIs are still net sellers with an overall outflow of ₹15,000 crores. However, today’s session saw a shift, with FIIs purchasing nearly ₹3,000 crores, while DIIs (Domestic Institutional Investors) were also net buyers. This combined buying activity has given the market a strong and positive start.

Looking ahead, as we approach key buyer levels and the crucial date of April 2, it will be important to observe how FIIs react towards the end of the month. Their stance in the coming sessions could determine the market’s next major move.

Option chain analysis

Call writers are experiencing increasing pressure as the market continues its steep movements, leading to significant short covering. Meanwhile, put writers are benefiting from this scenario, taking advantage of the rapid price swings. As call writers cover their positions, their strike levels are moving farther from the current Nifty levels, suggesting the potential for further market movement.

Currently, the highest open interest (OI) as CE writers is at the 22800 level, with approximately 1,33,020 contracts, making it a key resistance zone. On the other hand, put writers are benefiting from the ongoing momentum, near term support is look 23500 with the 1,10,630 contracts

Nifty 50 prediction

We are now just one candle away from reaching the 22800 level, a key zone we have been discussing for the past four days. Since the market closed above the 50-day moving average, we had anticipated that it would move toward 22800 level and as expected, it is now approaching that level.

22800 level is not just a price target but also a crucial point for trend identification. At this stage, we can say that the market structure has changed. While we are not yet calling it fully bullish, the trend has likely shifted from bearish to at least sideways.

If the market successfully closes above this level, the next significant resistance will be 24200 an important price point to watch. However, all eyes will be on how upcoming events unfold and, more importantly, how FIIs contribute to breaking through the 22800 resistance zone.

Conclusion

The market is experiencing an unprecedented movement. At first glance, this may seem like an irregular trend, but a deeper analysis reveals that this rally is primarily driven by financial services, rather than the IT sector or other domestically focused industries that are less impacted by tariffs. This indicates a level of sustainability in the market.

Another crucial factor is that the market had not shown significant movement in the last six weeks, and even over the past six months, it remained relatively subdued. This makes the current rally even more noteworthy.

Now, all eyes are on the 22800 level, as this week will be a crucial test for market sentiment. The key question remains: Will this month end with FIIs as net buyers? The market’s response in the coming sessions will provide the answer.