Nifty Bank’s Uptrend Intact Despite Near-Term Consolidation Near Record Highs

Market Snapshot

The Nifty Bank index is currently in a healthy consolidation phase near its all-time highs, following a fresh record of 60,437.35 in the previous session. While the index did not see aggressive follow-through buying at elevated levels, it continued to hold firmly above key support zones, signalling strength beneath the surface.

Tuesday’s session remained muted and range-bound, with the banking benchmark ending marginally higher. The index gained 74.20 points to close at 60,118.40, reflecting orderly profit booking rather than any sign of trend fatigue. The price action suggests consolidation within an ongoing uptrend, allowing the market to absorb recent gains.

Technical View: Bullish Structure Remains Strong

From a technical perspective, Nifty Bank is trading above its earlier consolidation neckline, indicating a constructive retracement toward the breakout zone. The broader price structure remains supportive, with a series of higher lows intact, reinforcing the strength of the prevailing uptrend.

Notably, the index continues to trade comfortably above its 10-day Exponential Moving Average (DEMA), highlighting that the underlying bullish framework remains strong and that intraday declines are being absorbed efficiently.

The psychological 60,000 level has emerged as a pivotal support area. This zone, which previously acted as a resistance, has now transformed into a strong demand base. As long as the index sustains above this level, the overall technical setup remains favourable, with buyers firmly in control of the trend.

Momentum Indicators Signal Sustained Strength

Momentum indicators continue to support the bullish narrative. The Relative Strength Index (RSI) is above 60, indicating persistent bullish momentum and a well-established uptrend. This suggests that the current pause is more of a consolidation phase than a reversal.

As long as Nifty Bank remains above the 60,000–59,700 support band, intraday declines are likely to be viewed as buy-on-dips opportunities. A decisive breakout above the 60,500 resistance zone could open the door for the next leg of the rally toward the 61,000 level.

Derivatives Snapshot: Strong Support, Upside Potential Intact

The derivatives setup reflects a positive bias and growing optimism. Put writers have continued to build and maintain significant positions at at-the-money and nearby strikes, reinforcing the downside cushion and limiting immediate weakness. In contrast, call writers have reduced exposure at lower strikes and rolled positions higher, signalling expectations of further upside rather than a prolonged consolidation.

A substantial open interest build-up of approximately 12.06 lakh contracts at the 60,000 put strike firmly establishes this level as a critical support zone. On the upside, the addition of nearly 4.97 lakh call contracts at the 60,500 strike has emerged as an immediate resistance area.

The Put-Call Ratio (PCR) remains steady at 1.11, reflecting improving bullish sentiment and the dominance of buyers at lower levels.

Market Outlook: Buy-on-Dips Strategy Remains Valid

Nifty Bank’s inability to sustain above record highs reflects mild profit-taking, not the exhaustion of the broader uptrend. The ongoing higher-low price structure continues to highlight strong underlying demand, with corrections being swiftly absorbed near support zones, underscoring sustained investor confidence.

The 60,000–59,700 region has now emerged as a crucial support band and will be key in maintaining near-term stability. Persistent put writing around at-the-money strikes signals optimism and conviction in the continuation of the broader uptrend.

A sustained move above 60,500 could trigger fresh short covering and drive the index toward new record highs near 61,000. On the downside, any pullbacks toward the 59,700 zone are likely to attract buying interest, keeping the buy-on-dips strategy firmly intact in the near term.