Range-Bound Trade Signals Consolidation, Not Weakness, in Nifty Bank

Market Snapshot

The Nifty Bank index is currently witnessing a brief pause marked by healthy retracement and consolidation, with intraday declines proving short-lived and quickly met with buying interest. While the index has yet to show aggressive follow-through buying, it continues to hold firmly above its key breakout zone, underscoring the presence of strong underlying demand.

Wednesday’s session remained muted and range-bound, with the banking benchmark closing on a sideways note. The index slipped 127.55 points to end at 59,990.85, reinforcing the view that the ongoing phase reflects constructive consolidation rather than any loss of trend momentum.

Technical View: Pullback Within a Strong Uptrend

From a technical standpoint, Nifty Bank continues to trade above its prior consolidation neckline, indicating a controlled pullback toward the breakout area rather than a trend reversal. The broader price structure remains supportive, with the higher-low formation intact, highlighting active participation from buyers at lower levels.

Importantly, the index is holding comfortably above its 10-day Exponential Moving Average (DEMA), which is acting as immediate dynamic support. This setup reinforces the resilience of the bullish framework, as intraday dips are being efficiently absorbed.

The 60,000–59,700 breakout neckline has now emerged as a crucial support band. Previously a resistance zone, this area has successfully transitioned into a strong demand region. As long as the index sustains above this base, the broader technical structure remains favourable, with the probability of renewed buying interest staying elevated.

Momentum indicators continue to validate the positive undertone:

• RSI remains above the 60 mark, signalling sustained bullish momentum
• Holding above the 60,000–59,700 zone keeps the buy-on-dips strategy relevant

On the upside, a decisive move above 60,500 could pave the way for a fresh leg higher toward the 61,000 zone.

Derivatives Snapshot: Supportive Structure With Bullish Bias

The derivatives setup reflects a positive bias with improving sentiment. Put writers have continued to build and maintain substantial positions at at-the-money and nearby strikes, strengthening the downside cushion and limiting immediate weakness.

In contrast, call writers have reduced exposure at lower strikes and shifted positions higher, indicating expectations of further upside rather than an extended pause.

Key derivatives observations:

• Put OI build-up of ~19.65 lakh contracts at 59,500 firmly establishes this level as a strong support
• Call OI addition of ~13.23 lakh contracts at 60,000 highlights an immediate resistance zone

The Put-Call Ratio (PCR) eased marginally to 1.04 from 1.11, yet continues to reflect optimism and a bullish undertone, with buyers maintaining control at lower levels.

Market Outlook

Nifty Bank continues to consolidate constructively above its breakout point, with intraday pullbacks being swiftly absorbed—highlighting sustained buying interest and investor confidence. The ongoing higher-low structure, combined with prices holding above the 10-DEMA, keeps the broader setup firmly supportive.

The 60,000–59,700 region remains a critical support band and will be pivotal in maintaining near-term stability. Persistent put writing around at-the-money strikes signals conviction in the continuation of the broader uptrend.

• A sustained breakout above 60,500 could trigger short covering, pushing the index toward fresh highs near 61,000
• Any retracement toward 59,700 is likely to attract buying interest, keeping the buy-on-dips approach firmly intact

Until a decisive breakout occurs, Nifty Bank is expected to remain range-bound with a positive bias, consolidating gains before the next directional move.