Profit-Taking Drags Nifty Bank; All Eyes on 59,000 as Index Approaches a Decisive Juncture

The Nifty Bank index witnessed mild profit-taking on Tuesday, encountering notable selling pressure at higher levels as its underlying strength remained subdued. Despite the pullback, the index continues to trade within a narrow consolidation band, a time-based pause rather than a meaningful price correction, while still respecting its broader pattern of higher highs and higher lows. This structure underscores the durability of the ongoing uptrend, even as momentum temporarily cools.

The index extended its decline by 407.55 points, closing at 59,273.80, slipping below the lows of the previous three sessions. With the benchmark now hovering near a cluster of key supports while maintaining its higher-low formation, defending this region is crucial for bulls to reassert upward momentum.

Technical Outlook: Retracement Near Key Support Zones

From a technical standpoint, Nifty Bank is undergoing a healthy retracement, currently hovering around its 10-DEMA, a level that has consistently acted as a reversal point in previous sessions. A decisive move above the 59,650 region, an immediate supply zone aligned with the lows of the last three sessions,s could reignite positive momentum and pave the way toward the 60,100 resistance.

On the downside, holding above the 10-DEMA near 59,200, combined with support from the upward-sloping trendline, remains vital. This cluster is shaping up as a dependable accumulation pocket, where renewed demand is likely to emerge if the index stabilizes.

At present, 59,650 remains the key resistance zone that must be cleared for meaningful strength to return. With directional clarity missing and momentum compressed, a breakout on either side will determine the next trend.

Momentum indicators echo a neutral-to-sideways bias. The 14-day RSI, while still above 60, reflects cooling momentum but not outright weakness. As long as Nifty Bank stays above the 59,000 demand region, buying interest on dips is expected to persist.

Derivatives Snapshot: Cautious Undertone Persists

The derivatives landscape reveals a cautious mood among participants. Call writers have aggressively expanded their positions at near- and at-the-money strikes, while put writers have partially unwound positions and shifted to lower levels, indicating expectations of continued consolidation or a mildly negative undertone.

A substantial buildup of nearly 13.62 lakh call contracts at the 60,000 strike confirms this level as a stiff resistance zone. On the flip side, strong put open interest of around 11.87 lakh contracts at the 59,000 strike reinforces this region as a crucial support base.

The Put-Call Ratio (PCR) has softened to 0.99 from 1.09, signalling rising caution as sellers dominate overhead supply zones.

Market Outlook: Range-Bound Until Breakout Materialises

Nifty Bank continues to struggle for clear directional cues amid persistent supply pressure near all-time highs. The index is likely to remain confined within a broader range unless a decisive breakout occurs.

A move above 59,650 remains the first trigger to revive momentum and potentially prompt short-covering rallies toward 60,000 and beyond. Conversely, as long as the index defends the 59,000 mark a confluence of key supports, including the 10-DEMA bulls are expected to retain their grip.

Until a clear move emerges on either side, a range-bound trading approach remains the most practical strategy for traders, with buying expected near support and selling near resistance.