The Bank Nifty index ended the previous trading session with a small bearish candlestick pattern, signaling indecision and minor profit booking near its recent highs. After witnessing a steady rally in the past sessions, the index now appears to be entering a consolidation phase, with traders closely watching for directional cues at key support and resistance levels.
Bearish Candle Indicates Cautious Sentiment
The narrow-bodied candle formed on the daily chart reflects a lack of strong momentum, as bulls failed to extend gains and bears showed resistance around the upper range. This pattern often indicates a short-term pause or minor pullback, especially after a strong upmove. However, the index still trades above its short-term moving averages, which keeps the broader trend intact.
Key Support Levels to Watch
Immediate support for Bank Nifty lies in the 56,800–57,000 range. This level has proven to be a strong cushion over the past week and is expected to attract buyers if tested again. A breach below this could invite further selling pressure, with downside targets at 56,500 and then 56,200. This lower zone is also reinforced by technical indicators such as the 20-day moving average, making it a critical area for trend confirmation.
Resistance Zone Between 57,500 and 58,000
On the upside, 57,500 remains a key hurdle, with 58,000 acting as a psychological barrier. The index needs strong momentum and volume support to break above this range. If the bulls manage to push through, a quick rally toward 58,300–58,500 is likely. However, repeated failure near 57,500 may strengthen resistance and lead to a sideways or corrective phase.
Options Data Indicates Cautious Undertone
The options chain data shows notable call writing around the 57,500 and 58,000 levels, suggesting traders expect limited upside in the short term. On the put side, significant interest around 57,000 highlights this level’s importance as near-term support. The overall put-call ratio is leaning slightly bearish, reflecting a balanced but cautious sentiment.
Trading Strategy for Monday
For intraday or short-term traders, a buy-on-dips approach near 56,800 with a stop-loss below 56,500 could offer a favorable risk-reward setup. Conversely, if the index opens flat and faces rejection near 57,500 again, shorting with tight stops may be appropriate.
Outlook Summary
Bank Nifty is expected to trade within a defined range of 56,800 to 57,600 in the upcoming session. A clear break on either side of this range could set the tone for the rest of the week. Traders are advised to stay agile and adapt based on early price action and sectoral cues from financial stocks.
Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. The Shining Media suggests its readers/audience to consult their financial advisors before making any money related decisions.
