Market Snapshot
The Nifty Bank index went through a volatile and corrective week, registering four consecutive negative sessions and surrendering a large portion of the previous week’s gains. The decline was marked by the formation of a strong bearish candle, reflecting rising nervousness amid resurfacing global uncertainties. On the weekly chart, the emergence of a Dark Cloud Cover pattern near record highs has raised concerns about the sustainability of the broader uptrend.
Risk-off sentiment was evident across the banking space, with heavyweight private and PSU banks ending the week in the red. The index witnessed a classic false breakout, trapping late buyers before slipping back into its earlier consolidation range. This failed breakout has visibly weakened the broader price structure.
Friday’s session remained firmly under bearish control, with every minor intraday recovery facing aggressive selling pressure. Persistent supply resulted in a decisive breach of key support levels, underlining clear seller dominance. Nifty Bank declined 434.95 points to close at 59,251.55, marking its steepest weekly fall in recent weeks and signalling a loss of bullish momentum with early signs of developing structural weakness.
Technical Analysis: Failed Breakout Signals Distribution
From a technical standpoint, the index has closed below the previous day’s high for five consecutive sessions, highlighting sustained distribution. The failure to sustain above the crucial 59,700–60,000 breakout zone has significantly heightened downside risks and increased the probability of continued corrective pressure.
The bearish Dark Cloud Cover formation on the weekly chart at all-time highs places Nifty Bank near a critical inflection point around the 59,000 level. Any follow-through selling from this region could decisively tilt the medium-term trend toward bearish territory. Adding to the negative bias, the index is trading below both its 20-day and 50-day exponential moving averages, which are now expected to act as immediate overhead resistance—reinforcing the view that rallies are being sold into.
The 59,700–60,000 zone, which earlier functioned as a strong demand region, has now transformed into a stiff resistance band. As long as the index remains below this range, the risk of further downside persists, with sellers retaining control of key levels.
Momentum indicators also reflect weakening strength. The Relative Strength Index (RSI) has slipped below the 50 mark, indicating fading bullish momentum. On the downside, 59,000 stands out as immediate support. A decisive break below this level could accelerate the corrective move toward lower retracement zones. A sustainable recovery would require a clear and sustained reclaim of the 59,700–60,000 zone to restore bullish confidence.
Derivatives Snapshot: Upside Capped by Call Writing
The derivatives setup aligns with the cautious-to-bearish tone visible in the cash market. Call writers have aggressively added fresh positions at at-the-money and nearby strikes, effectively capping near-term upside potential. In contrast, put writers have reduced exposure and shifted positions to lower strikes, signalling expectations of shallow pullbacks rather than a meaningful rebound.
A notable open interest addition of nearly 9.58 lakh contracts at the 59,000 put strike establishes this level as an important near-term support. On the upside, the build-up of around 16.05 lakh call contracts at the 59,500 strike strengthens this level as a key resistance ceiling. The Put-Call Ratio (PCR) continues to hover in the cautious zone near 0.85, reflecting elevated risk aversion and the dominance of call writing activity in the current series.
Market Outlook: Sell-on-Rallies Strategy Favoured
The broader trend for Nifty Bank has turned distinctly cautious following the failed breakout and the formation of a bearish reversal pattern at record highs. Slipping below key short- and medium-term moving averages has rendered the overall structure fragile, while the erosion of the previous week’s gains has clearly dented market confidence.
The formation of lower highs, combined with the swift selling of intraday recoveries, highlights persistent supply pressure at elevated levels. With the index closing below critical psychological supports, downside risks remain elevated. The 59,000 zone now assumes significant importance; a sustained breach below this level could open the door for a deeper correction toward the 58,600 region.
On the upside, any meaningful revival in bullish positioning is likely only if the index reclaims and sustains above the 60,000 mark. Until such confirmation emerges, a sell-on-rallies strategy is expected to remain the preferred approach in the near term.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
Nifty and Nifty Bank Today: Market Rebounds from Key Support, Outlook Remains Cautious
Nifty Index Update
The benchmark Nifty 50 staged a measured rebound from lower levels after testing crucial supports during the session. The index touched an intraday low of 25,473.40 before recovering to close at 25,790.25, up 0.42%, amid sharp two-way intraday volatility. On the daily chart, Nifty formed a hammer candlestick, indicating buying interest emerging near the lower end of the recent trading range.
Despite the bounce, the broader technical setup remains under pressure. Nifty continues to trade below the 20-day and 50-day simple moving averages, as well as the middle Bollinger Band, suggesting that the recovery lacks strong follow-through. The Relative Strength Index (RSI) has rebounded from oversold territory but remains below the neutral 50 mark, highlighting tentative momentum. Meanwhile, the MACD remains in negative territory, with the histogram signalling weak upside traction.
Volatility remains elevated, with India VIX rising 4.05% to 11.36, indicating the likelihood of continued intraday swings until volatility cools below the 10.50 level.
Key Levels to Watch – Nifty
- Support: 25,600–25,550
- Resistance: 25,950–26,000
As long as Nifty remains below the 26,000 mark, the near-term outlook stays cautious, and any rebound is expected to face selling pressure at higher levels.
Nifty Bank Outlook
Nifty Bank also recovered from intraday lows and closed at 59,450.50, up 0.34%, successfully defending its previous swing low. The daily chart formed a hammer candle, reflecting strong buying interest near lower levels.
From a trend perspective, the index continues to hold above the 50-day EMA, which provides near-term support. However, it remains below the middle Bollinger Band, indicating consolidation rather than a decisive trend reversal.
Momentum indicators suggest a tentative recovery. The daily RSI has edged higher toward the 51–52 zone, but remains far from overbought levels, while the MACD continues to stay in negative territory.
On the intraday timeframe, the 59,000–58,900 zone has emerged as a crucial support area, aligning with Supertrend support.
Key Levels to Watch – Nifty Bank
- Support: 58,900–59,000
- Resistance: 59,700–59,800
As long as Nifty Bank holds above the 58,900–59,000 band, downside risks remain contained. However, a sustained move above 59,800 is required to signal a return of bullish momentum. Until then, the index is likely to remain range-bound with a cautious bias.
Market View
Overall, both Nifty and Nifty Bank have bounced from important support levels, but the recovery appears technical and tentative rather than trend-defining. With key indices still trading below critical moving averages and volatility remaining elevated, a sell-on-rallies or range-trading approach is likely to dominate the near-term market strategy.
Easy & quick
Leave A Comment?