Nifty Bank Analysis: Resistance Caps Upside as FOMC and Expiry Events Add Volatility

Nifty Bank is trading in a narrow range as major events and expiry pressures play out. The index has held above 56,000, but hasn’t managed to break resistance. Below is a technical and derivatives overview with main points for traders.

Muted Momentum Amid Expiry and FOMC Overhang

Nifty Bank traded quietly before the monthly F&O expiry, showing that traders were cautious. Even with some volatility, the index closed above 56,000, helped by support from the 50-day Exponential Moving Average near 56,100.

A recent reversal candle suggests a short-term base near 55,800–56,000, creating a key support area. On the other hand, resistance remains strong at 56,600–56,700, where several short-term moving averages are grouped, limiting further gains.

Key Levels to Watch

• Support Zone: 55,700–55,800 (includes 50-DEMA support)
• Resistance Zone: 56,600–56,700 (cluster of short-term MAs + strong call writing)
• Crucial Resistance to Watch: Sustained move above 56,700 needed for bullish confirmation
• Immediate Support: Holding 56,000 is crucial for avoiding breakdown risk

On Wednesday, the index closed at 56,150.70, down 71.30 points, highlighting continued indecision and range-bound price action.

Technical Outlook: Range-Bound with Negative Bias

The Relative Strength Index (RSI) is still weak, staying near 40, which shows there isn’t much bullish momentum. Price is now stuck between clear levels, suggesting a breakout or breakdown could happen soon.

If the index fails to hold above 55,700, it may trigger fresh downside pressure, while a breakout above 56,700 could ignite a short-term rally.

Derivatives Snapshot: Bears in Control

In the F&O segment:

• Call writing remains aggressive at the 57,000 strike (25.28 lakh contracts OI) — a strong upside barrier.
• Put open interest is highest at 56,000 (15.80 lakh contracts) — indicating firm near-term support.
• Increased put writing at lower levels suggests gradual support-building.
• Put-Call Ratio (PCR) declined from 0.60 to 0.59, reinforcing the cautious tone.

The data suggests a well-defined trading range with more aggressive bearish bets on the upside.

Market Sentiment & Strategy

With the FOMC policy update and monthly expiry coming up, Nifty Bank will likely stay volatile. Traders should be careful until the market picks a clear direction.

A bullish reversal candle has appeared, but without follow-through, confidence remains low. Unless the index moves clearly above 56,700, traders will likely sell on rallies instead of buying into strength.

Conclusion: Stay Light, Trade the Range

In the near term, the market will probably stay range-bound with a slight bearish bias until it breaks key resistance. Traders should avoid big bets and focus on the main support and resistance levels.

• Buy near support: 55,800–56,000
• Sell near resistance: 56,600–56,700
• Wait for confirmation before taking breakout/breakdown trades

It’s best to use careful, flexible strategies in this busy and volatile market.