Bearish Undertone Persists in Bank Nifty as 55,000 Turns into Stiff Resistance

The Bank Nifty index witnessed sustained selling pressure through the week, nearly erasing the gains of the previous two weeks and closing below its prior low, leaving the overall structure visibly fragile. The index also slipped under its 20-week EMA while forming a Falling Three Methods candlestick pattern on the weekly chart, a bearish signal that suggests weakness in the near term.

This marked the third straight weekly decline, with the benchmark failing to surpass the prior day’s high for six consecutive sessions — a clear sign that caution dominates trader sentiment.

Technical Breakdown

• The index has closed firmly below the 20-, 50-, and 100-day EMAs, which coincide with the 0.382 Fibonacci retracement, creating a strong resistance cluster that earlier acted as support.
  
  
• Unless the index reclaims the 55,200 mark, every rebound is likely to invite fresh selling pressure.
  
  
• On the downside, a decisive breach below 54,300 could accelerate the correction further.
  
  

Friday’s session reinforced bearish control, with sellers capping all recovery attempts. Former support levels have flipped into resistance, while consecutive lower closes and drifting resistance bands add to the weakness.

The index ended the week 586.85 points lower at 54,389.35, hovering just above its immediate support zone of 54,000–54,050, which aligns with the 0.786 Fibonacci retracement. Resistance has shifted lower to the 54,900–55,100 band.

Momentum Indicators

• RSI is hovering just above 40, signaling that bearish momentum remains intact.
  
  
• The weak close below critical support zones has also trapped buyers, increasing the risk of renewed selling on every minor pullback.
  
  

Derivatives Snapshot

The derivatives landscape also signals caution:

• A sharp build-up of 20.65 lakh contracts at the 55,000 strike confirms it as a major resistance ceiling.
  
  
• Significantly the OI of 17.01 lakh contracts at the 54,000 strike highlights this as a strong support base.
  
  
• The Put-Call Ratio (PCR) dropped to 0.63 from 0.77, underscoring bearish bias. While oversold levels suggest short-covering rallies are possible, the broader tone remains weak.
  
  

Market Sentiment & Outlook

The broader stance for Bank Nifty has weakened significantly. The Falling Three Methods candlestick on the weekly chart, coupled with:

• Six consecutive sessions of lower closes,
  
  
• A visible pattern of lower highs on the daily chart,
  
  
• Sustained trade below key moving averages,
  
  

…all confirm that the trend has tilted decisively to the downside.

What once acted as a strong support zone has now turned into a stiff resistance barrier. With call writers aggressively adding positions at at-the-money strikes and put writers shifting lower, the upside is likely to remain capped.

• As long as the index trades below 54,800–55,000, sellers are expected to dominate.
  
  
• A breakdown below 54,300 could expose the index to further downside toward the 54,000 mark.
  
  

 The near-term outlook remains sideways to bearish, with any rebounds likely to face selling pressure unless the index decisively reclaims the 55,200 level.