Derivative Market Prediction 23rd July 2025

Market Prediction 23rd July 2025 Based on Derivative Market Data

The Indian stock market exhibited a bearish tone on July 22, 2025, with the Nifty 50 index closing at 25,060.9 and the Bank Nifty at 56,756. In the cash market, Foreign Institutional Investors (FIIs) sold shares worth ₹3,566.75 crore, while Domestic Institutional Investors (DIIs) countered with purchases of ₹5,044.45 crore, resulting in a net inflow of ₹1,477.7 crore. Despite this positive cash flow, derivative market analysis, including option chain data and open interest (OI) positions, suggests a cautious outlook for July 23, 2025. Professional traders, who are key market movers, hold significant short positions, indicating potential downward pressure in the upcoming session.

Nifty Outlook 

FII and DII Activity in the Cash and Derivatives Market

The cash market activity on July 22, 2025, showed a divergence between FIIs and DIIs. FIIs sold ₹3,566.75 crore worth of shares, which typically signals bearish sentiment in the Indian stock market. Conversely, DIIs bought ₹5,044.45 crore, leading to a net positive inflow. This buying by DIIs could provide some support to the market, but the bearish stance of FIIs, combined with their derivative positions, warrants caution.

In the derivatives market, FIIs hold a net short position in index futures, with -1,284 long contracts and 2,926 short contracts, resulting in a net short of 4,210 contracts. Additionally, their total long contracts across futures and options stand at 103,790, while short contracts are higher at 129,271, reinforcing a bearish outlook. Professional traders also exhibit a bearish stance, with 168,660 long contracts compared to 361,895 short contracts, indicating that key market participants are positioned for a potential decline.

Nifty Option Chain Analysis

The option chain for Nifty’s nearest expiry provides critical insights into potential support and resistance levels. The highest call open interest (OI) is at the 25,100 strike, with 173,870 contracts, followed closely by the 25,200 strike with 172,603 contracts. This concentration of call OI suggests strong resistance around the 25,100–25,200 zone. On the put side, the highest OI is at the 25,000 strike with 117,105 contracts, indicating a key support level.

Key Observations:

• Call Writing at 25,100: The significant increase in call OI at 25,100 (+73,590 contracts) indicates fresh call writing, a bearish signal as it suggests sellers are betting against the index rising above this level.
• Put Writing at 25,000: The increase in put OI at 25,000 (+10,874 contracts) suggests put writing, which is bullish and reinforces support at this level.
• Put-Call Ratio (PCR): The PCR for the nearest expiry, calculated as total put OI divided by total call OI, is approximately 0.84. A PCR below 1 typically indicates bearish sentiment, as there are more call options than put options.

Behavior Near the 25,100 Zone

On July 22, 2025, Nifty opened at 25,166.65, reached a high of 25,182, and then declined to a low of 25,035.55 before closing at 25,060.9. The index approached the 25,100 resistance zone but faced selling pressure, failing to sustain above it. This rejection aligns with the heavy call writing at 25,100, confirming the resistance level’s significance in the market prediction for July 23, 2025.

Trend Prediction for July 23, 2025

Based on the option chain data, the max pain level—where the total value of options is minimized—is likely around 25,000–25,100. The bearish PCR of 0.84, combined with significant call writing at 25,100, suggests that Nifty may struggle to break above this resistance. The support at 25,000, bolstered by put writing, could hold in the near term. However, a break below 25,000 could lead to further downside towards 24,900 or lower, making this a critical level to watch in the stock market predictions.

Bank Nifty Option Chain Analysis

Option Chain Data

The Bank Nifty option chain for the nearest expiry shows the highest call OI at the 57,000 strike with 57,356 contracts, indicating strong resistance. The highest put OI is at the 56,000 strike with 43,771 contracts, suggesting support. However, a notable decrease in put OI at 56,000 by 11,025 contracts indicates put unwinding, which weakens this support level.

Key Observations:

• Call Writing at 57,000: The increase in call OI at 57,000 (+9,402 contracts) suggests fresh call writing, reinforcing resistance at this level.
• Put Unwinding at 56,000: The significant decrease in put OI at 56,000 (-11,025 contracts) indicates put unwinding, a bearish signal that weakens the support level.
• Volatility: Implied volatility (IV) for calls at 57,000 is around 9.47%, and for puts at 56,000, it is 12.18%, indicating moderate expected volatility.

Market Behavior Near 56,800

Bank Nifty traded between 56,692 and 57,286.15 on July 22, 2025, closing at 56,756. The index approached the 57,000 resistance level but faced selling pressure, closing lower than its previous close of 56,952.75. This behavior, combined with put unwinding at 56,000, suggests weakening support and potential for further declines in the Bank Nifty outlook.

Market Outlook Based on Cumulative OI Across Expiries

The cumulative open interest data across all expiries provides a broader perspective on the market outlook. For Nifty, the total call OI is 3,546,798, and the total put OI is 2,981,050.67, resulting in a PCR of 0.84. For Bank Nifty, the total call OI is 714,922, and the total put OI is 580,506.29, yielding a PCR of 0.81. Both PCR values below 1 indicate a bearish sentiment, as call options dominate over put options.

Key Levels:

• Nifty: Maximum call OI is at 25,100, and maximum put OI is at 25,000, aligning with the nearest expiry data.
• Bank Nifty: Maximum call OI is at 57,000, and maximum put OI is at 56,000, consistent with the nearest expiry analysis.

The cumulative data suggests a strong bearish trend for both indices, driven by higher call OI and short positions by key market participants. The alignment of bearish signals across both Nifty and Bank Nifty reinforces the cautious market prediction for July 23, 2025.

Daily Price Action and Technical Analysis

Nifty Price Action

On July 22, 2025, Nifty opened at 25,166.65, higher than its previous close of 25,090.7, indicating initial bullish momentum. However, the index reached a high of 25,182 before declining to a low of 25,035.55 and closing at 25,060.9. This forms a bearish candlestick pattern, likely a shooting star or bearish engulfing, characterized by a long upper wick and a close below the opening price. This pattern suggests that sellers overpowered buyers, leading to a rejection from higher levels.

Bank Nifty Price Action

Bank Nifty followed a similar pattern, trading between 56,692 and 57,286.15 and closing at 56,756, lower than its previous close of 56,952.75. The bearish price action indicates selling pressure, particularly near the 57,000 resistance level.

Technical Indicators:

• Volume: While specific volume data is unavailable, the significant price movement and rejection from higher levels suggest higher-than-average selling volume.
• Trend: The bearish candlestick patterns for both indices indicate a potential continuation of the downward trend unless a reversal signal emerges.

Summary of Market Participants Data

The market participants’ data highlights the positions of key players:

• FIIs: Net short in index futures (-4,210 contracts) and overall derivatives (103,790 long vs. 129,271 short contracts).
• Professional Traders: More short contracts (361,895) than long contracts (168,660), indicating a bearish stance.
• Clients: Net long with 734,150 long contracts versus 522,750 short contracts, suggesting retail optimism.
• DIIs: Limited derivative activity, with 5,830 long contracts and a negative short contract figure, possibly due to data inconsistencies.

The bearish positioning by FIIs and professional traders, who are key market movers, suggests that they are driving the market’s direction. Their net short positions align with the bearish signals from the option chain and price action, supporting a cautious market prediction for July 23, 2025.

Final Market Prediction for 23rd July 2025

Based on the comprehensive analysis of FII/DII activity, option chain data, cumulative OI, and daily price action, the market outlook for July 23, 2025, is neutral to bearish.

• Nifty Prediction: The Nifty 50 is likely to face resistance around 25,100, supported by heavy call writing. Support is expected at 25,000, bolstered by put writing. A break below 25,000 could lead to further declines towards 24,900–24,800. Traders should monitor the 25,000 level closely, as it will be pivotal in determining the next move.
• Bank Nifty Outlook: Resistance is seen at 57,000, with support at 56,500. The weakening support at 56,000 due to put unwinding increases the risk of a decline towards this level if 56,500 is breached.
• Overall Sentiment: The bearish signals from derivative market data, including low PCR values and short positions by FIIs and professional traders, suggest caution. However, the net cash inflow from DIIs provides some underlying support, making the outlook neutral to bearish rather than strongly bearish.

Disclaimer: The analysis and views expressed in this article are for educational and informational purposes only. This is not a buy or sell recommendation. Please consult your financial advisor before making any trading decisions.

Also Read: Market Prediction July 22, 2025

This detailed market prediction for July 23, 2025, leverages derivative market analysis and price action to provide actionable insights for traders and investors. By understanding key levels, participant activity, and technical patterns, market participants can better navigate the Indian stock market’s dynamics. Always conduct thorough research and consider multiple factors before making trading decisions.