Nifty Bank Trades Volatile as Bulls and Bears Lock Horns Near Key Support and Resistance

Market Recap

Nifty Bank attempted a rebound from the lower end of its recent trading range; however, despite a strong gap-up opening, the index once again failed to sustain at higher levels and faced selling pressure from intraday highs. While short covering emerged near key support zones, the rebound lacked conviction and did not translate into a decisive close.

The weak structure persisted as the index failed to hold above its 20-day Exponential Moving Average (EMA) and could not close above the previous session’s high for the fourth consecutive session, highlighting continued supply at resistance levels. Nifty Bank currently remains trapped between its 20-day and 50-day EMAs, reflecting stalled momentum and an absence of directional clarity.

The recent bounce appears to be driven largely by oversold conditions and stock-specific, news-led moves within select banking counters, rather than by broad-based buying confidence. This lack of strong participation continues to weigh on the prospects of a sustainable recovery.

At present, the index is hovering near its critical support band of 58,700–58,500, which has clearly emerged as a decisive make-or-break zone. Although this area has held so far, buying momentum remains muted. Additionally, several earlier support levels breached in recent sessions have now turned into overhead resistance, signalling gradual weakening in the broader structure.

Unless Nifty Bank decisively sustains above the immediate swing high of 59,500, which also coincides with the 20-day EMA, selling pressure is likely to re-emerge on any pullback-led recovery.

Thursday’s session was marked by heightened volatility, with bulls and bears locked in a tug-of-war. The gap-up opening could not be defended, and selling intensified at higher zones, indicating that confirmation of a durable recovery is still awaited. Nifty Bank eventually closed 399.80 points higher at 59,200.10, reinforcing expectations of a widening range and elevated near-term volatility.

Technical View

From a technical standpoint, Nifty Bank has formed consecutive indecisive candlesticks near a critical inflection zone, reflecting uncertainty and lack of directional conviction. Although prices are trading in an oversold region, repeated failures to reclaim immediate resistance levels highlight persistent selling interest on rallies.

The ongoing lower-high formation, combined with consistent selling during intraday rebounds, points to a clear sell-on-rise market behaviour, with bears retaining control. The broader trend remains vulnerable. While intermittent short-covering rallies cannot be ruled out, any upside move risks turning into a bull trap unless the index decisively reclaims the 59,500 resistance zone.

Nifty Bank continues to trade below its short-term moving averages, including the 10-day and 20-day EMAs, indicating that buyers are yet to regain dominance. The 59,500–59,700 zone, which earlier acted as a strong demand area, has now transformed into a key supply zone.

On the downside, the 58,500–58,700 band, aligned with the lower end of the recent consolidation range, is expected to provide immediate short-term support.

Momentum indicators continue to warrant caution:

• RSI remains below the 50 mark, reflecting sideways-to-bearish momentum
• A decisive breakdown below 58,500 could accelerate selling pressure
• Any meaningful revival would require a sustained move above 59,500–59,600

Derivatives Snapshot

The derivatives setup remains aligned with the cautious technical structure. Call writers have aggressively added fresh positions at at-the-money and nearby strikes, effectively capping near-term upside. Meanwhile, put writers have built positions at lower strikes, indicating expectations of a range-bound phase rather than a directional move.

• 59,500 Call Strike: Open interest build-up of ~11.11 lakh contracts, marking it as strong resistance
• 59,000 Put Strike: Addition of ~10.63 lakh contracts, reinforcing this zone as immediate support
• Put–Call Ratio (PCR): Improved marginally to 0.73 from 0.68, reflecting elevated caution and continued call writer dominance

Market Outlook

Nifty Bank has recovered modestly over the past two sessions; however, buying strength remains absent. The index continues to trade in a weak-to-bearish phase, with every intraday rebound attracting selling pressure. Despite periodic oversold bounces, the lack of sustained participation keeps the near-term outlook guarded.

Trading below key short- and medium-term moving averages, the overall structure remains fragile. This view is further reinforced by consecutive doji formations near a critical base, highlighting the importance of the current make-or-break zone.

The near-term range is clearly defined:

• Resistance: 59,500
• Support: 58,500

A decisive breakout on either side is likely to dictate the next directional move. The 58,500 level assumes added importance due to the convergence of technical and derivatives-based support. A breakdown below this zone could open the door for a deeper correction toward 58,000. On the upside, a meaningful improvement in sentiment is likely only if the index sustains firmly above 59,500.

Until such confirmation emerges, sell-on-rise strategies are expected to dominate, with traders advised to remain selective, disciplined, and cautious.