PSU Banks Drive Strength; Nifty Bank Scales Fresh Peak

The Nifty Bank index continued its upward climb, closing at a fresh three-week high on optimism surrounding the U.S. Federal Reserve’s rate-cut decision. The decisive breakout above the psychological 55,000 mark has bolstered market sentiment, with PSU banks leading the rally. Their strong momentum has helped the index not only climb higher but also flip resistance zones into dependable supports, reinforcing a bullish structure.

Technical Overview: Breakout Confirmed

Throughout the session, the index sustained its gap-up opening, with every dip quickly absorbed by buyers. On the daily chart, a bullish marubozu candlestick signaled a clean breakout and emphasized the shift of supports to higher levels. This price action confirms that resistance barriers are weakening, while the formation of higher lows over the past two weeks continues to highlight structural strength.

Momentum indicators also support the bullish narrative. The RSI hovers near 60, pointing to steady upward momentum and signaling that retracements, if any, may be opportunities for fresh accumulation.

The index advanced 345.70 points to close at 55,493.30. With resistance-turned-support dynamics in play, the 55,000–55,150 zone has emerged as a solid base. On the upside, immediate hurdles are placed at 55,600 and 55,650 (aligned with the 0.78% Fibonacci retracement), while 55,000 continues to act as a dependable floor.

Derivatives Snapshot: Bulls Retain the Edge

In the derivatives market, sentiment stayed constructive:

• The 56,000 strike witnessed heavy open interest buildup of 13.75 lakh contracts, establishing it as a near-term resistance ceiling.
  
  
• On the downside, the 55,000 strike recorded the highest put OI at 14.14 lakh contracts, cementing it as a strong support zone.
  
  
• Fresh put writing at current levels indicates limited conviction for sharp declines, while unwinding of call positions reflects improving confidence.
  
  

The Put-Call Ratio (PCR) edged up to 1.09 from 1.08, maintaining a bullish undertone with scope for sustained upside momentum.

Market Sentiment & Outlook

Nifty Bank’s clean breakout above 55,000, combined with leadership from PSU banks, strengthens the case for continued upside. With put writers actively building positions near at-the-money levels and call writers shifting to higher strikes, the derivatives setup reflects ongoing optimism.

As long as the index holds above 55,000–55,150, buying interest is likely to remain intact. On the higher side, a sustained move beyond 55,620 could pave the way toward 56,100 in the near term.

Adding to the positive outlook, persistent short-covering from FPIs and PSU banks’ leadership in this rally further fuel the bullish narrative. While some profit booking cannot be ruled out after the Fed-driven gains, the broader structure remains firmly tilted in favor of the bulls.