Nifty Bank stabilizes near lower levels but broader trend remains under pressure

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

Nifty Bank index witnessed a volatile yet range-bound session and closed marginally higher by 0.29% at 53,562, indicating selective buying interest emerging near crucial support zones despite the broader undertone remaining cautious. On the daily chart, the index continues to trade below its 10-DEMA placed near 54,024, highlighting that the short-term trend remains under pressure and every pullback rally is witnessing supply near higher levels.

Technically, the index is consolidating near the 0.50 and 0.618 Fibonacci retracement zone, reflecting a phase of time-wise correction after the recent sharp decline. Momentum indicator RSI is hovering near 41, suggesting subdued momentum and lack of strong bullish participation. The daily structure continues to exhibit lower-high formations, indicating sellers are still dominating near resistance zones and upside momentum remains capped and which may keep the banking index confined within a broader trading band in the near term.

From a derivatives perspective, aggressive call writing near 54,000-54,500 levels is restricting immediate upside momentum, while meaningful put writing near 53,000-52,900 continues to provide a strong support cushion on declines. PCR stands near 0.79, reflecting cautious positioning and stock-specific participation within the banking space. The overall setup suggests Nifty Bank is currently undergoing a consolidation phase before the next directional move. As long as the index sustains above 53,000, a range-bound buy-on-dips strategy near support zones may remain favourable for pullback targets towards 54,000-54,500, while a decisive break-down below 53,000 could again trigger fresh weakness towards 52,500 levels.

Source : Equity Bulls

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