Nifty: Consolidation Continues as Bears Fail to Trigger Breakdown
Dhupesh Dhameja,
Derivatives Research Analyst,
SAMCO Securities
Mumbai, 5 June 2026: Nifty index witnessed a lacklustre session and closed 49.85 points lower (-0.21%) at 23,366.70 yet continued to defend the crucial 23,300–23,250 support zone, indicating strong buying interest at lower levels.
Derivatives Analysis Report
Nifty Holds Strong Base Near 23,250
Despite recent volatility, the index has been consolidating near this region, suggesting the formation of a solid base after the sharp correction witnessed in previous weeks.
Technically, the index remains below its 10-DEMA, reflecting a cautious near-term trend. However, bears have repeatedly failed to drag the index decisively below support, highlighting downside exhaustion and reducing the probability of aggressive selling at current levels. The RSI near 41 remains in the lower range, indicating subdued momentum, though the indicator has started stabilizing, suggesting that selling pressure is gradually losing steam.
From a derivatives perspective, significant put writing at 23,300 and 23,000 continues to strengthen the support base, while heavy call writers' presence at 23,500 and 23,700 is restricting any meaningful upside. The PCR stands at 0.69, reflecting a cautious undertone and indicating that traders remain reluctant to build aggressive long positions despite the index holding key support levels. Meanwhile, India VIX remained subdued near 15.8, signalling stable volatility expectations and supporting the ongoing consolidation phase.
As long as the index sustains above 23,250, a buy-on-dips strategy remains favourable. A decisive move above 23,500 could attract fresh buying interest and trigger a recovery toward 23,700–23,850, while a breach below 23,250 may once again invite selling pressure.
Nifty Bank Logs Third Straight Higher Close
Nifty Bank index extended its recovery for the fourth consecutive session, closing 188.40 points higher (+0.35%) at 54,496.25. However, the formation of a Doji candle near the crucial 54,500 resistance zone reflects indecision after the recent rebound and suggests that the next directional move could be significant.
Technically, the index has managed to sustain above its 20-DEMA placed near 54,000, indicating improving short-term strength. The RSI has crossed above the 50 mark and is trending higher near 50.1, highlighting that the momentum is not only strengthening but the buyers participation has also improved. The series of three consecutive higher closes also points toward gradual accumulation at lower levels.
From a derivatives perspective, substantial put open interest at 54,000 and 53,500 reinforces the support structure, while aggressive call writing at 54,500 and 55,000 continues to cap upside momentum. The PCR stands at 0.91, reflecting a balanced-to-positive undertone. The 54,500 zone remains a crucial hurdle. A sustained move above this level could trigger fresh buying towards 55,000–55,500. On the downside, 54,000 remains the key support. A buy-on-dips strategy remains favourable as long as the index sustains above the 20-DEMA and the 54,000 support base.
Technical Analysis Report
Nifty ends lower for the second consecutive week
Om Mehra, Technical Research Analyst, SAMCO Securities
Nifty ended the session at 23,366.70, down 0.21% for the day and 0.77% for the week, forming a bearish candle on both the daily and weekly charts. On the weekly timeframe, the index has now recorded a second consecutive week of decline. The index remains well below its 20-day SMA, currently placed near 23,650, which may cap any recovery attempts in the short term.
The daily RSI is placed near 41, slipping back below its signal line at 45, indicating weakening momentum. The MACD remains in negative territory. India VIX settled at 15.78.
The key resistance on the daily chart is placed in the 23,550–23,600 zone. On the downside, 23,150–23,200 remains the immediate support area. Nifty continues to oscillate within a broader trading range, suggesting that a decisive move beyond these levels may be required to establish the next directional trend.
Nifty Bank ended the session at 54,496.25, up 0.35% on the day and 0.47% for the week, indicating relative strength compared to the broader market. On the daily chart, the index formed a green candle and closed above the 20-day SMA, placed near 54,100, for the second consecutive session. On the weekly chart, Nifty Bank has formed a Dragonfly Doji, suggesting buying support at lower levels.
The RSI on the daily chart has crossed above the 50 mark, indicating a mild improvement in momentum. The MACD remains in positive territory, reflecting an improving short-term trend.
The immediate resistance is placed in the 55,000–55,200 zone, and a sustained close above this range could pave the way for a recovery towards 55,500. On the downside, 54,100, followed by 53,900, will act as key support levels to watch. The technical setup for Nifty Bank is gradually improving, although a decisive directional move is yet to emerge.
