Indian equity markets are set for an energetic start on Monday, with GIFT NIFTY pointing to a sharp gap-up opening. The big question traders are asking is simple, but loaded: will NIFTY50 stay above the psychological 26,000 mark, or fade after the open?
Early signals look upbeat. But markets, you know, love to test patience.
The setup going into the session reflects optimism mixed with caution, driven by global cues, options positioning, and a technical zone that has rejected price before.
Global cues set the tone before the opening bell
Overnight sentiment from overseas markets has been friendly, and that mood is spilling into Asia.
US stocks pushed higher last week despite ongoing chatter around stretched valuations in technology shares. Investors there appeared more focused on cooling inflation data than valuation math. A US CPI reading of 2.7% helped soothe nerves, reviving talk of additional rate cuts in 2026.
Asian markets followed suit early Monday.
Japanese equities crossed the 50,000 level, helped by a softer yen. That move came even after the Bank of Japan delivered a 25 basis point rate hike last week, a reminder that policy tightening doesn’t always mean falling markets.
Tracking this global backdrop, GIFT NIFTY futures traded more than 150 points higher in early hours, hinting at a strong opening for Indian indices.
GIFT NIFTY signals a gap-up, but follow-through matters
GIFT NIFTY has been a reliable mood indicator lately, and Monday’s reading is hard to ignore.
Futures jumped around 153 points in early trade, suggesting a gap-up opening well above Friday’s close. Historically, such openings bring two types of sessions: sustained trend days or quick profit-booking after the open.
Which one shows up depends on participation.
Early data showed strong breadth, with 47 stocks advancing and only three trading lower in the opening phase of the NIFTY50 basket. That kind of skew doesn’t scream weakness.
Still, experienced traders know the first hour can be noisy.
Holding above the opening range will be key. A failure there could drag the index back into its recent consolidation zone.
Options data hints at a tight battlefield
Options positioning for the December 23 expiry paints a picture of caution near the highs.
Maximum call open interest is stacked at the 26,000 strike. That level has acted like a ceiling more than once. On the downside, the highest put open interest sits at 25,900, marking it as immediate support.
Basically, traders are bracing for a narrow fight.
Here’s how the options landscape looks right now:
| Strike Level | Open Interest Bias | What it suggests |
|---|---|---|
| 26,000 | Heavy Call OI | Strong resistance |
| 25,900 | Heavy Put OI | Near-term support |
| 25,900–26,000 | High activity zone | Likely range-bound action |
This structure suggests that unless there’s aggressive buying, NIFTY50 may oscillate within this 100-point band for most of the session.
A clean move above 26,000 would likely need short covering, not just fresh longs.
Technical setup shows a bounce, but resistance still looms
From a chart perspective, the index has done some repair work.
NIFTY50 rebounded sharply from its 50-day exponential moving average late last week. That bounce helped the index recover most of the weekly losses, ending the week just 0.3% lower.
The 20-day simple moving average now sits close to the 26,000 zone, making it a crowded level technically as well as psychologically.
One thing stands out.
If NIFTY50 manages a sustained move above 26,000 on a closing basis, it could shift sentiment from cautious to constructive. Traders watching weekly charts see that level as a gatekeeper for the next leg of consolidation, or possibly, a breakout attempt.
But if the index stalls here again, expect patience to thin out.
Sector action and stock-specific moves to watch
Broad participation has helped recent recoveries, and Monday’s early trade hinted at more of the same.
Cyclicals and select financials showed strength alongside index heavyweights. Defensive pockets remained quiet, which usually aligns with risk-on sentiment.
That said, leadership remains selective.
Traders are keeping a close eye on stocks that have lagged the index during the recent bounce. If they start joining the move, the rally could gain legs. If not, the index may struggle to build momentum above resistance.
One sentence sums up the mood: optimism is there, but it’s not reckless.
What traders are likely watching through the day
The session may come down to a few simple intraday cues.
Sustained trade above 26,000 in the first half would be encouraging. Failure to hold 25,900 could flip sentiment quickly. Volume, especially in index heavyweights, will matter more than headlines.
Markets are entering the week with a positive bias, no doubt.
