The Nifty Bank index remained sideways ahead of the upcoming monetary policy announcement, amid a noticeable drop in trading volumes. Despite several intraday recovery attempts, the index once again failed to post a decisive close above the previous session’s high. Persistent overhead resistance and repeated supply on rebounds indicate a time-based consolidation phase, not a deep price correction.
While every minor pullback faces selling pressure, lower zones continue to attract fresh demand—reinforcing the broader range-bound market structure.
On Thursday, Nifty Bank closed 59.55 points lower at 59,288.70, forming an indecision candle and extending its oscillation within a wider consolidation band. The index remains positioned near the 20-DEMA, a trend-sensitive support level that has historically served as a dependable reversal zone.
Technical Analysis: Nifty Bank at a Critical Inflection Point
The formation of Doji candles reflects elevated indecision among market participants as they await policy-related cues. The index is currently trading close to both strong support and strong resistance levels, making the next breakout crucial for trend clarity.
Key Technical Levels to Track
Immediate Resistance: 59,600
- This zone aligns with the lows of the past three sessions.
- A decisive close above 59,600 is essential to revive bullish momentum.
- A breakout may open the path toward 60,000–60,100.
Critical Support Zone: 58,900–59,000
- Formed by the 20-DEMA and the 0.382 Fibonacci retracement level.
- This acts as the final make-or-break support band for the ongoing structure.
Momentum Indicators
- The 14-day RSI has eased toward 61, indicating a shift toward neutral momentum.
- Volatility remains compressed, underscoring the range-bound nature of the market.
As long as the index holds above 58,900, near-term sentiment is expected to remain neutral-to-sideways, with dips attracting opportunistic buying.
Derivatives Snapshot: Cautious Positioning Dominates
The derivatives data indicate a prudent and cautious stance among traders:
Call OI Build-Up
- Significant addition of 14.62 lakh call contracts at the 60,000 strike.
- This reinforces 60,000 as a strong supply barrier.
Put OI Support
- Heavy put open interest of 11.76 lakh contracts at the 59,000 strike.
- This marks 59,000 as a critical support base.
Put-Call Ratio (PCR)
- PCR improved slightly to 0.90 (from 0.96).
- Despite the uptick, the ratio still indicates neutral-to-cautious sentiment, with call writers holding dominance at upper levels.
The build-up across strikes suggests expectations of continued consolidation or a mildly soft bias until a breakout occurs.
Market Outlook: Breakout Above 59,600 Holds the Key
Nifty Bank continues to trade within a broader consolidation structure, waiting for macro triggers to define the next directional move.
Bullish Scenario
- A sustained move above 59,600 could trigger short-covering.
- Upside targets open toward 60,000–60,100, with momentum likely to strengthen thereafter.
Bearish Scenario
- A breach below 58,900 may expose the index to deeper downside risks.
- The breakdown can invalidate the current consolidation structure and shift momentum in favour of the bears.
Most Probable Near-Term Setup
- A range-bound phase is likely to persist until the monetary policy outcome provides fresh cues.
- As long as Nifty Bank stays above 58,900, bulls will retain tactical control, supporting a buy-on-dips framework.
Conclusion
The Nifty Bank index is experiencing a phase of heightened indecision, reflected in successive Doji formations and reduced volumes. With trading activity clustered around key support and resistance levels, the next directional move hinges on a breakout from the existing range.
A convincing close above 59,600 will be the first sign of renewed bullish momentum, while holding the 58,900–59,000 support zone remains essential for maintaining market stability in the near term.
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