The Nifty Bank index continued its volatile and choppy trajectory on Wednesday, extending its consolidation phase for the third straight session. Despite intraday swings and repeated selling pressure at higher levels, the index has managed to hold firm near key support zones, signalling a time-wise consolidation rather than a deep price correction. While minor recovery attempts are still being met with overhead supply, declines continue to attract buying interest, preserving a bearish-to-range-bound market structure.
The index gained 74.45 points to close at 59,348.25, staging a modest pullback from lower levels and positioning itself directly above the critical 20-DEMA, a historically dependable region for trend reversals.
Technical Outlook: Bullish Hammer Near Key Support Zone
From a technical standpoint, Nifty Bank has formed a bullish Hammer candlestick on the daily chart, precisely at the 20-DEMA. This zone has repeatedly acted as a strong reversal level in recent sessions. A decisive close above 59,500, the immediate supply pocket created by the lows of the previous three sessions remains crucial to reigniting bullish momentum.
A breakout above 59,500 could open the door to 60,100, supported by short covering and renewed directional conviction. On the downside, the index must hold above the 20-DEMA and the 0.382 Fibonacci retracement level located between 59,000–58,900. This cluster serves as the make-or-break support, and a breach below this level may trigger deeper corrective pressure.
For the near term, 59,500 remains the key overhead resistance to track. With volatility compressing and directional clarity missing, a breakout on either side of the current range is required to establish a meaningful trend. Momentum remains supportive, with the 14-day RSI holding above 60, indicating underlying strength despite the ongoing consolidation.
Derivatives Snapshot: Neutral-to-Cautious Undertone
The derivatives landscape continues to reflect a cautiously neutral market sentiment. While call writers have aggressively built positions at near and at-the-money strikes, put writers have trimmed exposure and shifted to lower levels, suggesting expectations of continued consolidation or a mild corrective phase.
A significant accumulation of 13.03 lakh call contracts at the 60,000 strike confirms this level as a major resistance barrier. Meanwhile, strong put OI of 12.73 lakh contracts at the 59,000 strike reinforces this zone as a strong support base.
The Put-Call Ratio (PCR) has eased to 0.96, down from 0.99, indicating increasing caution among traders as overhead supply zones remain firmly defended.
Market Outlook: Breakout Above 59,500 Needed for Fresh Upside
Nifty Bank continues to remain confined within a broad sideways range, closing below the previous session’s high for the third consecutive day. Persistent selling pressure near the upper band is restricting strong upside attempts, while consistent demand at lower levels is preventing a deeper pullback.
A decisive breakout above 59,500 is essential to kick-start a meaningful uptrend and potentially unlock gains toward 60,100. With the index hovering around a confluence of key support levels, including the 20-DEMA and the Fibonacci retracement zone, bulls must defend this pocket to maintain control.
Derivatives data reveal strong call writing near at-the-money strikes, which, combined with put positions defending the 59,000 level, indicates a sideways-to-cautiously-neutral bias among market participants.
As long as Nifty Bank sustains above 58,900, the broader sentiment is expected to remain stable, keeping the index locked within a well-defined range. Until a clear breakout unfolds, adopting a range-bound trading approach remains the most effective strategy.
Easy & quick
Leave A Comment?