Bearish Pressure Intensifies as Nifty Bank Slips Below Crucial Supports

The Nifty Bank index ended August on a fragile footing, marking its fifth consecutive close below the prior session’s high and slipping to a fresh three-month low. The monthly chart has formed a strong bearish candle, signaling that sellers have firmly taken control.

On the daily chart, every minor uptick continues to be swiftly sold into, underscoring the persistent weakness in sentiment. More worryingly, Nifty Bank has slipped below all major support belts, flipping them into fresh resistance zones and leaving the index increasingly vulnerable on the downside.

The index closed at 53,655.65, down 164.70 points, positioning itself precariously near make-or-break levels.

Technical Picture

• Support:
  
  
  • Immediate cushion lies at 53,500–53,400, aligning with its previous swing low and the 200-day EMA.
    
    
  • Breaching this zone could trigger a deeper slide toward 53,000 and beyond.
    
    
• Resistance:
  
  
  • The earlier demand zone of 54,300–54,500 has now reversed into immediate resistance.
    
    
  • Unless the index decisively closes above this band, upside momentum is unlikely to sustain.
    
    
• Momentum Indicators:
  
  
  • The RSI has slipped below 30, indicating oversold conditions and extreme weakness.
    
    
  • Lower-timeframe charts suggest the possibility of a short-lived technical bounce, although sustainability remains doubtful.
    
    

Derivatives Snapshot

The F&O setup reinforces the fragile sentiment:

• Aggressive Call Writing: At the 54,000 strike, OI jumped to 9.03 lakh contracts, cementing it as a strong ceiling.
  
  
• Support Base: The 53,000 strike holds the highest Put OI at 7.98 lakh contracts, serving as the immediate support.
  
  
• Shift in Positioning: Unwinding of puts at higher strikes and migration to lower levels—paired with renewed call writing—highlights weak conviction in an upside breakout.
  
  
• PCR Trend: The Put-Call Ratio (PCR) slipped from 0.92 to 0.85, clearly reflecting call-side dominance and persistent supply pressure.
  
  

Market Sentiment & Outlook

Closing August on a weak note, Nifty Bank has broken beneath critical support zones while confirming a bearish monthly setup. With resistances steadily shifting lower and call writers tightening their grip, the broader structure remains fragile.

• Upside view: A decisive close above 54,500 is essential for any meaningful recovery.
  
  
• Downside risk: Sustaining above 53,500 is critical to avoid further declines toward 53,000.
  
  
• Trading approach: Until clarity emerges, a “sell-on-rise” strategy remains prudent. Any rebounds driven by oversold conditions are likely to invite fresh shorting opportunities, rather than signaling a turnaround.
  
  

 Bottom Line: With bearish momentum firmly in place and options positioning favoring sellers, Nifty Bank remains under pressure. Only a strong recovery above resistance zones can alter the prevailing weak outlook.