Nifty Bank faces fresh weakness; 54,500 emerge as crucial hurdle for recovery

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

The Nifty Bank index extended its weakness for the second consecutive session, closing at 53,643.10, down 596 points (-1.10%). On the daily chart, the index slipped below its 20-DEMA (54,432) and breached the lower end of its recent consolidation range, indicating that sellers have regained control in the short term.

Technically, the index continues to form a sequence of lower highs and lower lows, keeping the near-term bias negative. The immediate support is placed in the 53,300-53,000 zone, where Put writers have built meaningful positions. A breach below this region could trigger further downsides toward 51,915, followed by 50,666. On the upside, the breakdown zone of 54,300-54,500 is likely to act as a strong resistance, and only a sustained move above this region can revive bullish momentum.

Momentum indicators remained subdued, with the RSI at 43.02, trading below the neutral 50 mark and signaling weakening buying strength.

From the derivatives front, option data suggests a cautious undertone. Significant call writing is visible at 54,000 and 54,500 strikes, highlighting strong overhead resistance, while Put writers are actively defending the 53,000 and 53,500 strikes. PCR stands at 0.85, indicating a cautious-to-bearish undertone in the derivatives market.

As long as the index trades below 54,500, a sell-on-rise approach remains favorable. A decisive move below 53,300 may intensify selling pressure, while a close above 54,500 could trigger short-covering and improve sentiment.

Source : Equity Bulls

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DerivativesAnalysisReport SAMCOSecurities NiftyBank