MUMBAI, Nov. 26 -- Investors and traders have pared derivatives positions moving into the December series as markets brace for two major triggers-a potential India-US trade deal and a likely Federal Reserve rate cut next month-that could reverse foreign portfolio investment (FPI) outflows from India and cushion the rupee.

The lower positioning suggests markets could either surge to a fresh high or see profit booking depending on whether a trade deal is struck between the world's largest and fourth-largest economies.

Analysts anticipate a Nifty range of 23,200-29,000 for next year, depending on the outcome of the India-US trade negotiations. That implies a 10% pullback or 12% rally from Tuesday's close of 25,884.8, depending on whether n...