Nifty Bank Defends Key Levels; Sideways Consolidation Before Fresh Rally

The Bank Nifty index continued to display strength this week, defending crucial support levels despite mild profit-booking in Friday’s session. The index managed to secure its third straight weekly gain, closing above its three-week high and surpassing the critical 55,300 swing level, reinforcing a bullish undertone.

Key Weekly Highlights

• Bank Nifty ended Friday at 55,458.85, slipping 268.60 points, yet sustaining above the psychological 55,000 mark.
• The uptrend has been repeatedly supported by a steep ascending trendline, which has triggered strong reversals over the past three weeks.
• A Bullish Harami candlestick pattern formed on the weekly chart further complements the ongoing positive structure.
• Higher lows sustained for three consecutive weeks strengthen conviction in the broader uptrend.

Technical Outlook

Despite Friday’s minor decline, the technical setup for Bank Nifty remains constructive:

• Support zone: 55,100–55,200 (reinforced by 0.382 Fibonacci retracement at 55,125).
• Resistance zone: 55,800–56,000, with a potential breakout target near 56,750.
• Momentum Indicators: The RSI is steady near 60, signaling persistent strength, while a consistent pattern of buying on dips highlights the positive sentiment.

Corrective moves are expected to attract fresh buying interest as long as the index respects the 55,100–55,200 demand zone.

Derivatives Snapshot

The derivatives setup reflects resilience and signals a market inclined towards consolidation with a bullish tilt:

• At the 56,000 strike, heavy call open interest of 14.88 lakh contracts makes this the immediate resistance level.
• Strong support is visible at 55,000 put strike, with OI at 14.55 lakh contracts.
• The Put-Call Ratio eased slightly to 1.02 from 1.10, but continues to maintain a bullish bias.

Sustained put writing at lower levels indicates limited conviction for deeper declines, keeping downside risk capped.

Market Sentiment & Outlook

The broader structure of Bank Nifty remains bullish:

• Three consecutive weekly gains emphasize consistent dip-buying interest.
• FPI short-covering trends and reduction in net shorts continue to lend support to sentiment.
• A sustained close above 56,000 could trigger momentum toward 56,750 in the near term.

While intermittent profit-booking may occur, the index’s ability to defend supports makes a buy-on-dips strategy the preferred approach for traders.