Sideways Bias Persists for Nifty Bank as Momentum Indicators Stay Neutral

The Nifty Bank index continues to struggle for upside traction, facing persistent supply at higher levels and swift profit-booking on even minor intraday recoveries. The overall tone remains cautious and restrained, with the index largely oscillating within its established trading corridor. A close below the 20-day exponential moving average (EMA) signals a loss of short-term bullish momentum, while the absence of sustained follow-through buying highlights prevailing indecision among market participants.

Despite trading above 58,700, Nifty Bank has yet to show signs of a convincing bullish continuation.

Price Action Snapshot

On Friday, Nifty Bank ended the session on a weaker note, declining 172.25 points to close at 59,011.35. While the magnitude of the decline was modest, intraday price behaviour suggests that selling pressure is gradually being absorbed at lower levels, with selective buying emerging on dips.

However, unless the index delivers a decisive breakout above the 59,500–59,700 supply zone, any rebound is likely to be perceived as a technical retracement rather than the beginning of a fresh uptrend. A sustained move beyond this resistance band remains essential to restore bullish momentum.

Technical Structure and Momentum Indicators

From a technical standpoint, the index remains firmly entrenched in a consolidation phase, with the broader range capped near 59,600 on the upside and supported around 58,600 on the downside. The continuation of a lower-high formation keeps 59,500 positioned as a critical pivot for any meaningful trend reversal.

Momentum indicators reinforce the sideways bias:

• The Relative Strength Index (RSI) is hovering close to the neutral 50 level, indicating muted momentum
• Price action below short-term moving averages reflects the absence of directional conviction
• The setup favours time-wise consolidation over sharp directional movement

Derivatives Snapshot

The derivatives data reflects a cautious and guarded market stance.

• Call writers have added fresh positions at at-the-money and nearby strikes, strengthening overhead resistance and limiting upside potential
• Put writers have reduced exposure and shifted positions to lower strikes, indicating expectations of prolonged range-bound trade rather than an immediate breakout

Key option positioning:

• Nearly 22.82 lakh call contracts at the 59,500 strike, reinforcing it as a strong resistance zone
• Around 16.04 lakh put contracts at the 59,000 strike, offering near-term support
• Put-Call Ratio (PCR) has slipped to 0.66 from 0.70, underscoring cautious sentiment and suggesting sellers retain an upper hand at elevated levels

Market Outlook

Nifty Bank continues to encounter selling pressure on every recovery attempt, keeping the near-term structure fragile. The broader setup remains vulnerable amid an extended consolidation phase, with sellers actively defending the 59,500–59,700 resistance band.

On the downside, the 58,700–58,800 zone has emerged as a key demand area and will be pivotal in maintaining short-term stability. The heavy concentration of call writing near at-the-money strikes, along with the gradual migration of put positions to lower levels, reinforces the prevailing sideways-to-negative bias.

• A decisive and sustained close above 59,500 could rekindle bullish momentum and open the path toward the 60,100 zone
• Conversely, a breakdown below 58,800 may weaken the structure, invite fresh selling pressure, and drag the index toward the 58,500 level, thereby extending the ongoing consolidation phase

Until a clear directional breakout emerges, range-bound trading strategies are likely to dominate, with traders closely monitoring key support and resistance levels for confirmation.