Sideways Bias Persists for Nifty Bank as Momentum Indicators Stay Neutral

Nifty Bank index continued to find it difficult to gain upside traction, facing persistent supply at higher levels and swift profit-booking on even minor intraday recoveries. The overall tone remained cautious and restrained, with the index largely moving within its established trading corridor. A close below the 20-day exponential moving average (DEMA) signals a loss of short-term bullish momentum, while the absence of sustained follow-through buying highlights prevailing indecision. Despite holding above the 58,700 mark, the index is yet to exhibit signs of a convincing bullish continuation.

On Friday, Nifty Bank ended the session on a weaker note, declining 172.25 points to close at 59,011.35. While the fall itself was modest, intraday price behaviour suggests that selling pressure is gradually being absorbed at lower levels, with selective buying emerging on dips. That said, unless the index decisively breaks above the 59,500-59,700 supply zone, any rebound is likely to be viewed as a technical retracement rather than the start of a fresh uptrend. A sustained move above this resistance band remains crucial to restore bullish momentum.

From a technical standpoint, the index remains entrenched in a consolidation phase, with the broader range capped near 59,600 on the upside and supported around 58,600 on the downside. The continuation of a lower-high formation keeps 59,500 firmly positioned as a critical pivot for any meaningful trend reversal.

Momentum indicators reinforce this sideways bias, with the Relative Strength Index (RSI) hovering close to the neutral 50 mark-signalling muted momentum and favouring time-wise consolidation over sharp directional movement.

Derivatives Snapshot

The derivatives data reflects a cautious market stance. Call writers have added fresh positions at at-the-money and nearby strikes, strengthening overhead resistance and limiting upside potential.

Meanwhile, put writers have reduced exposure and shifted positions to lower strikes, indicating expectations of prolonged range-bound trade rather than an immediate breakout.

A notable accumulation of nearly 22.82 lakh call contracts at the 59,500 strike reinforces this level as a strong resistance zone. On the downside, the presence of around 16.04 lakh put contracts at the 59,000 strike offers a near-term support buffer. The Put-Call Ratio (PCR) has slipped to 0.66 from 0.70, underscoring cautious sentiment and suggesting that sellers continue to retain an upper hand at elevated levels.

Market Outlook

Nifty Bank continues to face selling pressure on every recovery attempt, keeping the near-term structure fragile. The broader setup remains vulnerable amid an extended consolidation phase, with sellers actively defending the 59,500-59,700 resistance band. On the downside, the 58,700-58,800 zone has emerged as a key demand area and will be pivotal in maintaining short-term stability.

The heavy concentration of call writing near at-the-money strikes, alongside the gradual migration of put positions to lower levels, reinforces the prevailing sideways-to-negative bias. A decisive and sustained close above 59,500 could rekindle bullish momentum and open the path toward the 60,100 zone.

Conversely, a breakdown below 58,800 may weaken the structure, invite fresh selling pressure, and pull the index toward the 58,500 level-thereby extending the ongoing consolidation phase.

Source : Equity Bulls

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Nifty BankIndex NSE TechnicalIndicators Derivatives