Nifty: Consolidation Phase Continues
Dhupesh dhameja,
Derivatives Research Analyst,
SAMCO Securities
Mumbai, 21 May 2026: Nifty index witnessed yet another volatile and range-bound trading session, where the benchmark failed to sustain intraday recovery and eventually settled marginally lower by 4.30 points at 23,654.70 (-0.02%).
Derivatives Analysis Report
Nifty ends muted amid tug-of-war between buyers and sellers
Despite intermittent buying attempts during the session, the index continued to face supply pressure near higher levels, highlighting that market participants remain cautious ahead of a decisive directional breakout.
On the daily chart, the index continues to trade below the falling 20-DEMA placed near 23,800, which is acting as a strong dynamic resistance zone. The repeated inability to sustain above this moving average reflects that short-term momentum still remains weak, as sellers continue to dominate near resistance levels. However, unlike the earlier sharp decline, the recent candles indicate reduced downside momentum and emergence of selective buying interest near lower levels, suggesting that the market is attempting to establish a near-term base. The 23,750–23,850 zone has emerged as a crucial hurdle for the bulls, as repeated rejection from this area confirms strong overhead supply.
On the lower side, buyers are consistently protecting the 23,400–23,300 region, resulting in a compressed trading structure indicates a temporary equilibrium is reached between buyers and sellers. Momentum indicators also continue to reflect a lack of aggressive directional strength. The RSI on the daily chart is placed near 45.55, indicating neutral-to-cautious momentum. India VIX declined sharply by 3.35% and closed near 17.82, indicating easing volatility and cooling market fear.
From the derivatives perspective, the options data also reflects a neutral-to-range-bound undertone. The PCR stands near 0.94, indicating balanced positioning between put and call writers. Significant call writing is visible near the 23,800–24,000 strike region, highlighting strong resistance at higher levels, while put writers continue to defend the 23,500–23,300 zone, indicating that downside support remains intact for now. Overall, the market structure suggests that Nifty is currently in a time-wise corrective phase, going ahead, a decisive close above the 23,800 zone could trigger short covering and improve sentiment toward 24,000–24,250 levels, while failure to hold above the lower consolidation base may once again invite volatility in the coming sessions.
Nifty Bank extends consolidation phase below the key resistance band
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.
Technical Analysis Report
Nifty Remains Locked in Range
Om Mehra, Technical Research Analyst, SAMCO Securities
Nifty ended the session flat at 23,654.70, down just 0.02%, as the index remained confined within a narrow range for yet another session. The daily chart continues to highlight a Darvas Box formation between 23,260 and 23,860, reflecting a clear absence of direction. The rising trendline support drawn from the March lows remains intact, continuing to provide a cushion beneath the ongoing consolidation. As long as this trendline holds, the correction is likely to remain limited.
The middle line of the Donchian Channel, placed near 23,870 and closely aligned with the 20-day SMA, is acting as the immediate short-term barrier. The RSI is placed near 45, reflecting subdued momentum. India VIX declined further to settle at 17.82. Meanwhile, USD-INR eased 0.40% to 96.19, with the rupee witnessing a mild recovery after touching recent historic lows near 96.95.
On the downside, the 23,400 level, followed by 23,300, remains the immediate support zone. On the upside, the 23,860–23,900 region continues to act as the immediate resistance. Nifty is likely to remain range-bound until a decisive breakout occurs from the current Darvas Box.
Nifty Bank ended the session at 53,439.40, declining 0.23%, after a wide intraday range. The daily chart candle with wicks on both sides reflects continued indecision within the current range. The index remains trapped between the 50% Fibonacci retracement at 53,700 and the 61.8% retracement at 52,820. Multiple sessions have now been confined within this band. Nifty Bank remains below all the moving averages. The RSI is placed near 40.
Nifty PSU Bank gained 0.22% to settle at 7,988.35, while Nifty Private Bank declined 0.15% to close at 25,990.05, indicating a rotation within the banking space. For the Nifty Bank index, on the downside, the 53,000–52,820 zone, aligned with the 61.8% Fibonacci, remains the support while on the upside, the 54,000–54,500 remains the next resistance.
