Nifty Bank Consolidates With Strength, Breakout Watch Above 61,000

Market Recap

The Nifty Bank index continues to display constructive yet unusual price behaviour, marked by sharp gap-up openings followed by range-bound trade within the initial hour’s price band. Despite the lack of aggressive directional momentum, the index has convincingly protected its key support zone, with the gap area continuing to act as an immediate cushion.

This ability to absorb supply pressure at lower levels has gradually shifted the near-term bias in favour of the bulls. A firm base is developing in the 60,200–60,000 zone, which aligns with the consolidation breakout neckline and remains the primary line of defence for the bulls.

Notably, even while trading close to its major resistance band of 60,800–61,000, the index has managed to hold above its gap support. A sustained move above this resistance zone could confirm follow-through buying. Structurally, the index continues to form higher lows and trade above its key moving averages, indicating sustained accumulation on declines.

The Monday session reflected a clear sideways undertone. After opening with a sharp gap-up, the index held on to its gains and successfully defended its support zone, highlighting active buying interest at lower levels. The index closed higher by 548.80 points at 60,669.35, reinforcing the prevailing buy-on-dips strategy.

Technical View

From a technical perspective, Nifty Bank appears to be in a continuation phase. Corrective declines are being consistently bought into, suggesting gradually improving bullish momentum. This steady improvement in price behaviour strengthens the case for maintaining a buy-on-dips approach in the near term.

A decisive move above the 61,000 mark could inject fresh momentum into the ongoing upmove. Importantly, the 60,300–60,000 zone, which earlier acted as a strong supply area, has now transformed into a key demand pocket.

This zone also coincides with:

• The 0.38 Fibonacci retracement level
  
  
• Key short- and medium-term moving averages
  

The confluence of these factors makes this region a critical inflection point for the index.

Momentum indicators remain supportive. The Relative Strength Index (RSI) is placed near 60, signalling a gradual strengthening of bullish momentum. A clean breakout above 61,000 could accelerate buying interest, while any corrective dips toward the 60,300–60,000 range are likely to be perceived as accumulation opportunities.

Derivatives Snapshot

Derivatives data reflects an improving and optimistic undertone. Put writers have added aggressive positions at out-of-the-money strikes, effectively cushioning the near-term downside. At the same time, call writers appear to be shifting their positions to higher strikes, indicating expectations of a range-bound market with a positive bias.

Key derivatives highlights:

• Open interest build-up of ~7.01 lakh contracts at the 61,000 call strike, marking it as a key resistance
  
  
• Addition of ~20.02 lakh put contracts at the 60,000 strike, reinforcing it as a strong immediate support
  
  
• Put–Call Ratio (PCR) stabilised near 1.01, reflecting sustained optimism and dominance of put writers
  

Overall, the derivatives setup suggests controlled consolidation with an upward bias, awaiting a breakout trigger.

Market Outlook

The Nifty Bank index is showing signs of bullish stabilisation, sustaining firmly above its short-term moving averages and building a solid base in the 60,300–60,200 zone. Despite repeated gap-up openings, intraday declines are being swiftly absorbed, highlighting renewed buying interest from lower levels.

A sustained follow-through above 61,000 could pave the way for a sharper short-covering rally. On the downside, any pullback toward the 60,300–60,200 band is expected to attract strong buying interest and support accumulation.

As long as these support levels remain intact, the buy-on-dips strategy is likely to remain favourable. Traders are advised to stay selective, disciplined, and cautious while navigating the evolving market structure.