Trade Setup for December 30: Nifty continues the slow grind down to 25,800 before final expiry of 2025

Ever since the Nifty failed to sustain above the 26,200 mark last Tuesday and Wednesday, it has been a slow grind lower for the index. First, it was the 20-DMA that was breached on the downside, and on Monday, even 26,000 could not survive.

Make no mistake, the Nifty is still locked in the broad 25,700 - 26,200 range, a range that the index finds itself stuck in for nearly two months now. Every dip towards 25,700 is being bought into and every rally towards 26,200 - 26,300 levels is sold into.

Tuesday is the final monthly NSE expiry of 2025, in fact, the final expiry of 2025. The penultimate day of the year would mean participation would dip even further as the year draws to a close. There will be changes in the F&O segment as well, with four stocks exiting and four entering from the start of the January series. Positions will be squared off, covered, unwound, and therefore, there could be enough and more volatility to highlight Tuesday's session.

If we consider this very narrow range, which stretches from the December 11 low of 25,693 to last Wednesday's high of 26,236, the Nifty has closed below both its 38.2% and 50% retracement levels. The next important level now is the 61.8% retracement of this recent upmove, which comes up to 25,904.

On the flip side, if we consider a broader range, which is the November 7 low of 25,318 and the recent record high on the Nifty of 26,325, the 50% retracement of that range comes up to 25,821, which many technical analysts are also expecting the Nifty to tumble towards, before any further buying interest emerges.

On the upside, the 26,000 will now become a key hurdle for the Nifty, followed by the 26,200 mark.

Osho Krishnan of Angel One said that the immediate support for the Nifty is placed between the 25,900 - 25,850 zone, while 25,700 is a crucial level for the near-term uptrend to sustain. On the upside, 26,100 - 26,150 levels remains a hurdle. He advises traders to monitor these levels and plan trades accordingly.

"This price action highlights sustained selling pressure at higher levels and a lack of follow-through buying, indicating short-term exhaustion and weakening momentum. Immediate resistance is placed in the 26,050–26,100 zone, while key supports are seen at 25,800–25,850. With the index slipping below the psychological 26,000 mark, a cautious trading strategy remains advisable, with heightened emphasis on capital protection and strict stop-loss discipline," Amruta Shinde of Choice Broking said.

The Nifty Bank was supposed to defend the 59,000 mark on the downside, which it failed to do so. However, the index did recover over 100 points from the lows of the day, which ensured that the Nifty losses stayed in check. More importantly, the index also managed to defend a key support of 58,980, which is the 38.2% retracement of the recent upmove seen by the index.

On the downside, below the 58,980 level, analysts are stating 58,800 to be a key support for the Nifty Bank, and a failure to defend those levels can also take the index down to 58,500 levels.

Going forward, Sudeep Shah of SBI Securities expects the 50-DEMA zone of 58,600 - 58,500 to act as an immediate support for the Nifty Bank, and a failure to protect that could even drag the index lower down to 58,000 levels in the short-term, he said. On the upside, 59,100 - 59,200 will act as an important hurdle for the index.

The conversation beyond the index will continue to be around precious metals and the volatility associated with it. Silver on the MCX saw a sharp correction from record high levels that went beyond the ₹2.5 lakh per kg mark.

The swings resulted in very volatile moves in names such as Hindustan Zinc and Hindustan Copper. While Hindustan Copper ended 10% off the day's high but still managed a close above the flat line, Hindustan Zinc snapped a four-day gaining streak.