Nifty Bank reclaims 59,000 but lacks follow-through strength

Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities

Nifty Bank once again found it difficult to sustain higher levels, encountering consistent resistance on every upward move and facing swift selling even on modest intraday recoveries. The index continued to display a subdued and indecisive tone, largely oscillating within its earlier trading band while remaining below the 20-day exponential moving average (DEMA)-a clear indication that bullish momentum is gradually fading. Although the benchmark managed to reclaim the 59,000 mark, it has yet to demonstrate any meaningful follow-through buying.

On Friday, the index ended the session on a muted note, inching up by 156.35 points to close at 59,069.20. Despite the marginal uptick, price action reflects a steady erosion in upside strength, with intraday rebounds repeatedly attracting selling interest or being utilised to initiate fresh short positions. Unless the index registers a sustained breakout above the recent swing-high zone of 59,500-59,700, rallies are likely to be treated as technical pullbacks rather than the beginning of a durable trend reversal.

From a technical perspective, Nifty Bank remains locked in a consolidation phase, with the broader trading corridor defined between 59,700 on the upside and 58,600 on the downside. The persistent lower-high structure keeps the 59,700 level firmly positioned as a critical inflection point for any meaningful improvement in trend strength. Momentum indicators continue to echo a neutral stance, with the Relative Strength Index (RSI) hovering around the 50 mark, underscoring the lack of directional conviction and supporting the view of time-wise consolidation rather than a sharp price correction.

Derivatives Snapshot

The derivatives landscape points to an increasing tone of caution. Call writers have intensified fresh additions at at-the-money and nearby strikes, reinforcing overhead supply on each recovery attempt. In contrast, put writers have pared positions and rolled exposure to lower strikes, signalling expectations of an extended consolidation phase rather than an imminent directional breakout.

A sizeable build-up of nearly 18.58 lakh call contracts at the 59,500 strike firmly establishes this level as a key resistance zone. On the downside, the presence of close to 14.00 lakh put contracts at the 59,000 strike provides a solid support cushion. The Put-Call Ratio (PCR) has edged up marginally to 0.73 from 0.70, reflecting cautious positioning and suggesting that sellers continue to maintain control at higher levels.

Market Outlook

Nifty Bank continues to encounter selling pressure on every rebound, keeping the near-term structure fragile. The broader setup remains vulnerable amid the ongoing lower-high formation, with sellers actively defending the 59,500-59,700 supply band. On the downside, the 58,700-58,600 zone has emerged as a crucial demand pocket and will be vital in preserving short-term stability.

The clustering of call writing near at-the-money strikes, coupled with the partial shift of put writing toward lower levels, further reinforces the prevailing range-bound bias. A decisive and sustained move above 59,700 could revive bullish momentum and open the path toward the 60,100 mark. Conversely, a breakdown below 58,600 may weaken the overall structure, invite fresh selling pressure, and drag the index toward the 58,000 level, thereby extending the ongoing consolidation phase.

Source : Equity Bulls

Keywords

NiftyBank SAMCOSecurities DEMA