Nifty Bank Technical Analysis: Relief Rally Faces Resistance Wall

The Nifty Bank index witnessed a much-needed rebound on Tuesday, thanks to a wave of short-covering from deeply oversold conditions. This relief rally comes as a breather for bulls after the recent steep sell-off. A strong bullish candle on the daily chart indicates some optimism, but the follow-through in the next few sessions will be critical.

Key Technical Highlights:

• Support Zone Held: The index respected its vital demand zone of 55,500–55,800, suggesting this level may act as a short-term floor.
  
  
• Resistance Zone in Focus: Despite the bounce, resistance at 56,500–56,800 remains intact. The index needs a close above this zone to confirm a trend reversal.
  
  
• Current Status: On Tuesday, Nifty Bank gained 137.10 points, closing at 56,222.00. However, it's still trading below the 10-DEMA and 20-DEMA, both in the 56,600–56,800 range — creating a technical confluence that caps the upside.
  
  
• Consolidation Phase: The index is stuck in a broad sideways range. A breakout beyond 56,800 or a breakdown below 55,500 will determine the next directional move.
  
  
• Momentum Check: The RSI is hovering near 40, indicating weak buying strength and a still-fragile setup.
  
  

F&O Derivatives Snapshot: Resistance Piled at 57,000

The derivatives data paints a cautious-to-bearish tone:

• Heavy Call Writing: The 57,000 strike shows substantial call open interest — 23.46 lakh contracts, making it a key resistance zone.
  
  
• Put Writing Support: The 56,000 strike has emerged as the nearest support with 15.26 lakh open interest contracts.
  
  
• PCR (Put-Call Ratio): The PCR has inched up from 0.59 to 0.60, but it still reflects a dominance of calls, suggesting limited bullish momentum.
  
  

Market Sentiment and Outlook

While the reclaiming of 56,000 gives a short-term relief signal, the index must sustain above 56,350 for any meaningful upside to follow. Until then, sellers are likely to remain active around resistance zones, especially near 56,800 and the psychological barrier at 57,000.

What’s Next?

• The market awaits macro events like the FOMC rate decision and monthly derivatives expiry, which may introduce significant volatility.
  
  
• Short-term traders should be cautious and prioritize risk management, especially within this volatile and event-heavy week.
  
  

Conclusion

The Nifty Bank index has shown signs of life, but it’s not out of the woods yet. The 56,800 ceiling must be breached for bulls to take control. Until then, expect rangebound action with a bearish undertone. Watch for decisive moves — both technically and from global cues — to set the tone for the coming sessions.