Nifty Bank lacks follow-through strength, consolidation continues below 50-DEMA

Derivatives Analysis Report - Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities

Nifty Bank witnessed a volatile yet range-bound trading session, where the index failed to sustain above higher resistance levels and eventually settled lower by 239.05 points at 54,853.85 (-0.43%). Despite intermittent recovery attempts, the index continued to face selling pressure near the falling 50-DEMA placed around 55,246, indicating that the broader short-term structure remains cautious.

Technically, the banking index continues to oscillate inside a broader consolidation band after the sharp corrective decline witnessed earlier. The 55,500-55,800 zone has emerged as an immediate resistance cluster, coinciding with the 0.50 Fibonacci retracement area, where repeated rejection highlights persistent overhead supply. On the downside, the support base has gradually shifted higher toward the 54,500-54,200 zone, as previous resistance levels are now acting as immediate support, reflecting selective buying interest on dips.

Momentum indicators are showing gradual improvement, with the daily RSI placed near 51.35, moving above its average and indicating stabilization in momentum despite the lack of strong directional expansion. From the derivatives perspective, the options data reflects a balanced-to-cautious undertone. PCR stands near 0.98, indicating relatively balanced positioning between call and put writers. Significant call writing is visible near the 55,000-55,500 strike region, making it a crucial resistance zone for the ongoing expiry, while put writers continue defending the 54,500-54,000 strikes, helping the index maintain its near-term support structure.

Overall, Nifty Bank remains trapped inside a broader consolidation range, and till the time the index sustains below the falling 50-DEMA and the 55,500 zone, a cautious range-bound approach with stock-specific opportunities remains the preferred strategy for the current market setup.

Source : Equity Bulls

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