The Nifty Bank index staged a sharp rebound on Wednesday after slipping into oversold territory, but the recovery stalled just below a crucial resistance zone. The index closed at 54,067.55, up 406.55 points, yet remained capped beneath the key 54,150–54,200 band. As long as the index struggles to cross this ceiling, traders should brace for choppy and directionless action with heightened volatility.
Technical Setup: Stuck Between Base and Ceiling
On the hourly chart, Nifty Bank has carved out a double-bottom formation, with strong support emerging around 53,500–53,600. This base also coincides with the 200-day EMA, reinforcing its significance.
- Resistance Zone: 54,150–54,200 (neckline + recent swing high).
- Support Zone: 53,500–53,600 (double-bottom + 200-DEMA).
- Daily RSI: Still hovering below 40, signaling subdued momentum and cautious sentiment.
A decisive breakout above 54,200 is essential to confirm short-covering strength and unlock further upside potential.
Derivatives Snapshot
The F&O data paints a cautious picture, with call writers continuing to dominate at higher levels.
- Call Side: Heavy writing at the 55,000 strike (OI: 12.58 lakh contracts), cementing it as a firm resistance ceiling.
- Put Side: The 54,000 strike drew the highest put OI of 13.36 lakh contracts, establishing it as immediate support.
- PCR: Edged up from 0.83 to 0.90, showing cautious optimism, but a price-based breakout is needed for validation.
Market Sentiment & Outlook
Nifty Bank sits at a pivotal juncture: sellers remain active at swing highs, while buyers defend the oversold base. The sideways trajectory between 53,500 and 54,200 remains firmly intact, with clustered call and put writing reinforcing this non-directional structure.
- Above 54,200: Short-covering could fuel a stronger upside rally.
- Below 53,500: Risks of deeper corrections increase sharply.
- Within 53,500–54,200: A Range Trading strategy remains the most prudent approach.
Easy & quick
Leave A Comment?