Nifty Bank extends consolidation phase below the key resistance band

Derivatives Analysis Report: Dhupesh dhameja, Derivatives Research Analyst, SAMCO Securities

Nifty Bank index witnessed another subdued and range-bound trading session, where the index failed to sustain higher levels and eventually settled lower by 122.80 points at 53,439.40 (-0.23%). Despite intermittent recovery attempts during the session, the index lacked follow-through buying strength, resulting in another weak close near the lower end of the recent trading range. On the daily chart, the index continues to trade below the falling 10-DEMA placed near 53,918, which is acting as an immediate dynamic resistance zone. The inability to sustain above this moving average reflects weak short-term momentum and continued dominance of sellers near resistance levels.

Technically, the index is hovering below the important 0.50 Fibonacci retracement, while immediate support is placed near the 0.618 retracement zone around 52,820. The repeated rejection from the 53,700-54,000 zone clearly indicates strong overhead supply, while buyers are attempting to defend lower levels near the 53,000 mark. The current setup reflects a compressed consolidation range. The momentum indicator RSI, continue to remain weak and hovering near 40.53, while staying below the neutral 50 mark, indicating that momentum remains tilted in favour of the bears.

From the derivatives perspective, the options data also reflects a cautious undertone. The PCR stands near 0.68, highlighting stronger call writing activity compared to put writing and indicating that traders are still positioning defensively. Significant call writing buildup is visible near the 53,500-54,000 strike region, making this zone an important resistance cluster for the ongoing expiry. On the downside, put writers are actively defending the 53,000 strike, which is currently acting as immediate support for the index.

Overall, the broader structure suggests that Nifty Bank remains under short-term pressure as it continues to trade below the falling 10-DEMA and key resistance zones. The repeated inability to sustain recovery rallies indicates lack of aggressive buying interest at higher levels, while support-based buying near lower levels is preventing a sharp breakdown. Going ahead, a decisive close above 54,000-54,200 could trigger short covering and improve momentum toward higher levels, while failure to hold above the 53,000 support zone may once again intensify selling pressure in the banking index.

Source : Equity Bulls

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DerivativesAnalysisReport NiftyBank SAMCOSecurities