Muted Momentum Grips Bank Nifty as Heavyweight Banks Stay Subdued

The Bank Nifty index continues to grapple with its immediate resistance, remaining locked in a narrow trading band as heavyweight banking names fail to provide decisive leadership. While consolidation persists, the index has managed to hold firmly above its crucial support, signaling that dips are still attracting buying interest despite muted overall momentum.

On Wednesday, the index ended with a mild decline of 166.65 points at 55,698.50, marking its third consecutive close below the prior day's high—a sign of aggressive call writing capping the upside. Still, sustained trade above the 55,500 support keeps the broader bias constructive.

Technical Overview

• The index remains stuck between its 50-DEMA (55,850) and 10-DEMA (55,550), reflecting short-term indecision.
  
  
• Immediate support lies at 55,500, while resistance stands at 55,800–56,000.
  
  
• A decisive breakout above 56,000 is essential to trigger sharp upside momentum and call unwinding, opening the path towards higher levels.
  
  
• On the downside, a close below 55,500 would trap existing long positions and potentially drag the index toward 55,000.
  
  
• The RSI remains below 50, mirroring subdued momentum and highlighting the need for a breakout to establish direction.
  
  

Derivatives Snapshot

The options market paints a picture of restrained sentiment:

• 56,000 strike → heavy call OI buildup at 18.40 lakh contracts, cementing it as a formidable resistance ceiling.
  
  
• 55,500 strike → highest put OI at 10.22 lakh contracts, offering a near-term support base.
  
  
• Put writers are cautiously shifting positions higher, but call writers remain aggressive at current resistances.
  
  
• The PCR slipped from 0.77 to 0.71, reflecting supply pressure at higher levels and continued dominance of call writers.
  
  

Market Sentiment & Outlook

The index is struggling to build positive momentum as leading banks remain subdued, leaving price action range-bound within 55,500–55,800.

• A breakout above 56,000 could unleash strong bullish momentum, fueled by short-covering.
  
  
• On the downside, 55,500–55,450 remains the key demand zone; a breach here would shift sentiment negative and expose 55,000.
  
  
• Until a breakout materializes, the broader structure suggests a sideways phase with an upward bias, where traders may prefer a range-trading approach with strict watch on 56,000 (breakout) and 55,450 (breakdown).