Nifty Bank Stays Range-Bound; Breakdown Below 56,600 Could Trigger Sharp Fall

The Nifty Bank index continued its sideways trend for the second consecutive session, showing mild relative strength compared to the broader Nifty 50. However, despite hovering above key support zones, the recovery remains shallow and unconvincing, suggesting that bearish undertones still dominate the trend.

On July 14, 2025, the index closed at 56,765.35, up just 10.65 points, struggling to gain traction above a critical resistance zone. The index has now formed back-to-back Doji candlesticks on the daily chart — a clear sign of indecision at a pivotal level.

Technical Analysis: Treading a Thin Line

• Closing Level: 56,765.35
• Immediate Support: 56,600
• Key Resistance: 57,300–57,370
• Structure: Range-bound with bearish bias

Despite minor upticks, the lack of institutional buying and repeated rejection near resistance zones implies fragile sentiment. Unless the index closes decisively above 57,300, upside momentum remains capped.

Chart Structure Highlights:

• Swing High at 57,370 has repeatedly triggered selling.
• Doji formations reflect market hesitation — neither bulls nor bears in control.
• Price trapped between 10-day and 20-day EMAs, indicating near-term consolidation.
• A breakdown below the session low (~56,700) could spark renewed selling toward 56,000.

Derivatives Snapshot: Bearish Edge Persists

The dominance of call writers at higher levels reflects a lack of bullish conviction, while cautious put writing shows hesitation to support at current levels. The PCR slipping to 0.80 reinforces a bearish tilt.

Momentum Check: RSI and EMAs Hint at Weakness

• The Relative Strength Index (RSI) is now below 60, indicating diminishing bullish strength.
• Price action remains constrained between short-term EMAs, showing directionless movement.
• Failure to surpass 57,300–57,350 will keep upside limited and may invite further short selling.

Market Sentiment & Outlook

Nifty Bank is trading near a make-or-break support zone of 56,600. A decisive breakdown below this level could unlock fresh downside potential to 56,000 in the near term. The recent swing high of 57,370 continues to act as a formidable resistance, reinforcing the bearish stance.

 Key Takeaways:

• Below 56,600: Confirmed breakdown, downside opens up to 56,000
• Above 57,350: Short covering and potential reversal
• In Between: Consolidation with bearish bias

Until a clean breakout or breakdown occurs, traders should brace for continued range-bound volatility, with a bearish tilt on the downside.

Trading Strategy: Stay Defensive

• Positional Traders: Watch for a breakdown below 56,600 to initiate fresh shorts.
• Intraday Traders: Sell on rallies near resistance; avoid aggressive longs until breakout.
• Investors: Remain on the sidelines until the trend clarifies above 57,350.

With foreign portfolio investors (FPIs) increasing short positions and broader market sentiment cautious, any upside attempt is likely to face resistance. Until a structural change is evident, bears are expected to stay in control.