Stock Market Closing Bell – 18 December 2025: Nifty Shows Early Reversal Signs; Short Covering Emerges as 25,900 Put Writing Builds Base
Updated: 18 Decmber 2025
Category: Closing Bell | Market Analysis
By CapitalKeeper Research Desk
Indian Stock Market Closing Bell 18 Dec 2025: Nifty ends at 25,815, Bank Nifty recovers, heavy Put writing at 25,900 and CE short covering hint at potential upside. Full market, options & global analysis.
Market Overview: A Day of Quiet Strength Beneath the Surface
The Indian equity market ended Thursday’s session on a cautiously positive note, masking a deeper shift happening beneath the surface. While headline indices showed limited movement, derivatives data, options activity, and intraday price behavior pointed toward an emerging change in sentiment.
The Nifty 50, after opening weak, managed to recover and close higher, signaling that downside momentum is slowing. Heavy Put writing at the 25,900 strike combined with short covering in Call options suggests that smart money may be preparing for an upside attempt in the coming sessions.
Despite muted global cues and low December participation, the market refused to break down further — a key observation for traders.
Index Performance Snapshot – 18 December 2025
| Index | Open | Close | Change | Trend |
|---|---|---|---|---|
| Nifty 50 | 25,764.70 | 25,815.55 | +50.85 | Recovery Attempt |
| Sensex | 84,518.33 | 84,481.81 | -36.52 | Flat |
| Bank Nifty | 58,712.70 | 58,912.85 | +200.15 | Mild Strength |
| Fin Nifty | 27,153.25 | 27,267.10 | +113.85 | Supportive |
Intraday Structure: Weak Open, Stronger Close
The market began on a cautious note due to:
- Lack of strong overnight global cues
- Thin December volumes
- Continued FII inactivity
However, as the session progressed:
- Selling pressure dried up near intraday lows
- Buyers selectively stepped into banking and financial stocks
- Short covering was clearly visible in index options
This resulted in a higher low formation on the intraday chart, a subtle but important signal.
Options Market Insight: The Real Story of the Day
Heavy Put Writing at 25,900 – A Key Signal
One of the most important developments today was aggressive Put writing at the 25,900 strike in Nifty options.
This indicates:
- Market participants are confident that Nifty will hold above 25,900
- Downside risk is perceived as limited
- Writers are comfortable collecting premium at higher levels
Call Option Short Covering Observed
Simultaneously:
- Short covering was seen in 25,900 CE and 26,000 CE
- Call writers began exiting positions as Nifty refused to fall
This combination of Put writing + CE short covering often acts as a precursor to an upside move.
What It Means Practically
- If Nifty crosses and sustains above 25,930,
- A fast short-covering rally could be triggered toward 26,050 – 26,150
Nifty 50 Technical Analysis
Nifty’s close at 25,815 may look modest on the surface, but technically it is significant.
Key Technical Observations
- RSI near 42 — coming out of oversold zone
- MACD showing loss of bearish momentum
- Price Action forming a base after multiple failed breakdowns
- Volume low but stabilizing (typical December behavior)
Important Levels to Watch
- Immediate Support: 25,720 – 25,650
- Strong Base Zone: 25,900 (options-driven)
- Trigger Level: 25,930
- Upside Targets:
- 26,050
- 26,150
- 26,280 (if momentum expands)
Bank Nifty: Quiet Accumulation Phase
Bank Nifty outperformed frontline indices today, closing above 58,900.
What’s Happening in Banking Stocks
- PSU banks remained steady
- Private banks showed mild accumulation
- No panic selling despite recent weakness
Technical View
- RSI: Near 45, stabilizing
- MACD: Flattening histogram
- Structure: Sideways with upward bias
Key Levels
- Support: 58,600
- Resistance: 59,200 → 59,500
Bank Nifty strength often acts as confirmation for broader market moves.
Fin Nifty: Silent Supporter of the Market
Fin Nifty closed higher at 27,267, reinforcing stability in:
- NBFCs
- Insurance stocks
- AMC-related counters
This suggests financials are not participating in panic, which strengthens the bullish undertone.
Sensex: Range-Bound but Stable
Sensex ended marginally lower, but importantly:
- Did not break recent support
- Heavyweights like Reliance and HDFC Bank stayed resilient
This indicates rotation, not distribution.
Sector-Wise Performance
Positive / Stable Sectors
- Banking & Financials
- Capital Goods (selective)
- Infrastructure-linked stocks
Weak / Range-Bound
- IT (awaiting global clarity)
- FMCG (valuation concerns)
- Metals (global cues mixed)
Overall, stock-specific momentum dominated the day.
Global Market Cues: Still Muted, But No Panic
US Markets
- Futures traded flat
- Bond yields stable
- Markets await upcoming macro cues
Asia
- Mixed performance
- No major risk-off signals
Europe
- Quiet session with low volumes
Global markets are not bullish, but importantly, not risk-off either — allowing Indian markets to stabilize.
Market Breadth & Participation
- Advances and declines nearly balanced
- Midcaps and smallcaps showed selective buying
- Volumes remained lower than average (December effect)
This confirms:
This is not a trending market yet — but a base-building phase.
Professional View: Why Today’s Session Matters
Despite low volatility and limited movement:
- Market refused to break lower
- Options data clearly shifted
- Smart money positioning improved
This is often how December rallies begin quietly, catching late sellers off guard.
Outlook for Coming Sessions
Short-Term View
- Bias: Cautiously Positive
- Strategy: Wait for breakout confirmation above 25,930
For Traders
- Avoid aggressive shorts below 25,900
- Focus on stock-specific momentum
- Index options favor premium buying on breakout
For Option Writers
- December remains low volatility
- Be alert: sudden expansion possible after consolidation
Internal Links for CapitalKeeper.in
- Pre-Market Analysis
- Nifty & Bank Nifty Technical Outlook
- Weekly Market Wrap
- Educational Series: RSI & MACD Explained
FAQs – Closing Bell 18 December 2025
1. Why is Put writing at 25,900 important?
It shows strong confidence that Nifty will not fall below this level.
2. What does CE short covering indicate?
It suggests bears are exiting, often preceding an upside move.
3. Is this a confirmed uptrend?
Not yet. Confirmation comes only above 25,930 with volume.
4. Should traders stay cautious?
Yes. December markets remain deceptive with sudden moves.
5. What is the key trigger level now?
25,930 on Nifty.
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Ranjit Sahoo
Founder & Chief Editor – CapitalKeeper.in
Ranjit Sahoo is the visionary behind CapitalKeeper.in, a leading platform for real-time market insights, technical analysis, and investment strategies. With a strong focus on Nifty, Bank Nifty, sector trends, and commodities, she delivers in-depth research that helps traders and investors make informed decisions.
Passionate about financial literacy, Ranjit blends technical precision with market storytelling, ensuring even complex concepts are accessible to readers of all levels. Her work covers pre-market analysis, intraday strategies, thematic investing, and long-term portfolio trends.
When he’s not decoding charts, Ranjit enjoys exploring coastal getaways and keeping an eye on emerging business themes.
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