Bank Nifty Holds Base Ahead of MPC Meet; Resistance at 55,200 Remains a Key Hurdle

The Bank Nifty index wrapped up the September series on a cautiously positive note, gaining 174.85 points to close at 54,635.85. Despite this muted rebound, the overall trend remains sideways-to-bearish, with persistent selling pressure capping every recovery attempt.

The upcoming MPC meeting has now become a crucial event, with market participants hoping for policy clarity to ease the current strain. Notably, PSU banks showed resilience in the last two sessions, providing some cushion, though a decisive reversal is yet to emerge.

Technical Outlook: Bank Nifty Struggles Below Resistance

• Closing Level: 54,635.85 (+174.85 points)
  
  
• Support Zone: 54,200–54,000 (aligned with 0.786 Fibonacci retracement)
  
  
• Resistance Zone: 55,000–55,200 (cluster of 20-, 50-, and 100-day EMAs)
  
  
• Indicators:
  
  
  • RSI remains below 50 → signals lack of momentum
    
    
  • Series of lower highs → highlights fragile sentiment
    
    
  • Failure to cross the previous day’s high for eight straight sessions → shows persistent caution
    
    

Unless Bank Nifty reclaims the 55,000–55,200 zone, any rebound is likely to face renewed supply. Conversely, a breakdown below 54,200 could open the gates for a decline toward 53,700.

Derivatives Snapshot

• Call OI: Heavy build-up at 55,000 strike (9.41 lakh contracts) reinforces resistance.
  
  
• Put OI: Notable support at 54,000 strike (8.71 lakh contracts).
  
  
• PCR (Put-Call Ratio): Edged up to 0.81 (from 0.77), though bias still leans bearish.
  
  
• Sentiment: Migration of puts to lower strikes + aggressive call writing signals restricted upside.
  
  

This setup mirrors the broader caution, with sellers defending higher levels aggressively.

Market Sentiment & Outlook

• Short-covering remains absent, with every rise meeting fresh selling.
  
  
• Lower highs and closes beneath key averages confirm ongoing weakness.
  
  
• PSU banks’ resilience offers some temporary support, but private banks continue to weigh on momentum.
  
  

Key levels to watch:

• Below 54,200: Further downside toward 53,700.
  
  
• Above 55,200: Potential reversal if sustained buying emerges.
  
  

Conclusion

The Bank Nifty is at a crossroads ahead of the MPC outcome. While the index is attempting to carve out a base, technical and derivatives data continue to reflect caution. For traders, the strategy remains simple:

• Stay cautious below 55,200 → selling pressure will dominate.
  
  
• Use dips near 54,200–54,000 as a watch zone for possible breakdowns.
  
  
• Wait for confirmation of a breakout before turning bullish.