Dhupesh Dhameja, 

Derivatives Research Analyst, 

SAMCO Securities

Mumbai, 2 June 2026: Nifty snapped its four-session losing streak and closed at 23,483.55, up 100.95 points (+0.43%), aided largely by short-covering at lower levels after the recent decline. 

Derivatives Analysis Report

Short-covering helps Nifty snaps four-day losing streak

Despite the recovery, the index continues to trade below its 20-DEMA (23,739), suggesting that the broader short-term trend remains weak and rallies are likely to face resistance at higher levels.

Technically, the index managed to defend the crucial 23,300–23,250 support zone, which has repeatedly acted as a demand area over the past few weeks. The rebound from this zone indicates that buyers are still active near lower levels; however, the inability to reclaim the 20-DEMA keeps the market in a cautious phase. Immediate resistance is now placed at 23,740–23,860, coinciding with the 20-DEMA and previous breakdown area. A sustained move above this zone could trigger further short-covering towards 24,000, while failure to do so may attract fresh selling pressure.

On the downside, 23,300–23,250 remains the first line of defense, followed by 23,116, which marks an important swing support. Momentum indicators remain subdued, with the RSI slipping near 42.95, staying below the neutral 50 mark and indicating that bullish momentum is yet to return decisively.

From the derivatives perspective, the options structure remains range-bound. Significant call writing is visible around the 23,500 and 24,000 strikes, highlighting overhead resistance, while put writers continue to defend the 23,300 and 23,500 strikes. The PCR stands at 0.99, reflecting a balanced setup between bulls and bears. Additionally, India VIX declined sharply by 7.42% to 15.31, indicating easing volatility and supporting the possibility of short-covering driven moves in the near term.

For the upcoming session, the index may continue to witness recovery attempts; however, as long as Nifty trades below its 20-DEMA near 23,740, the broader sentiment remains cautious. A decisive move above 23,860 could improve momentum, while a break below 23,300 may revive bearish pressure.

Nifty Bank snaps losing streak 

Nifty Bank snapped its four-session losing streak and closed at 53,714.65, up 71.55 points (+0.13%), supported by mild short-covering after the recent decline. However, despite the positive close, the recovery lacked conviction as the index continued to trade below its 20-DEMA at 54,364, keeping the broader short-term trend under pressure.

Technically, the index was confined within a falling channel structure and has been consistently facing resistance near its declining 20-DEMA. The inability to sustain above this moving average indicates that buyers are still struggling to regain control. Immediate resistance is placed in the 54,300–54,500 zone, which coincides with the 20-DEMA and the upper boundary of the recent trading range. A decisive breakout above this region could trigger further short-covering towards 55,000, while failure to do so may invite renewed selling pressure. On the downside, the 53,500–53,300 zone remains an important support area. A breach below this level could drag the index towards 51,915, followed by 50,666, where stronger demand is likely to emerge.

Momentum indicators remain subdued. The RSI is placed at 43.62, trading below the neutral 50 mark and indicating that momentum continues to favour a cautious stance despite today's rebound. From the derivatives perspective, the options data reflects a range-bound setup. Significant call writing is visible at the 54,000 and 54,500 strikes, suggesting strong overhead resistance, while put writers are actively positioned around the 53,000 and 53,500 strikes, providing near-term support. The PCR stands at 0.87, indicating a cautious-to-bearish derivatives setup; however, price action below the 20-DEMA suggests traders should remain selective until a decisive breakout occurs.

For the upcoming session, the recovery may extend if the index sustains above 53,500, but the broader structure remains cautious below 54,500. A close above this resistance zone could improve sentiment and trigger short-covering, whereas a break below 53,300 may revive bearish momentum.

Technical Analysis Report 

IT-sector Led Rally Helps Nifty Pause Losing Streak, VIX Drops 7%

Om Mehra, Technical Research Analyst, SAMCO Securities

Nifty opened with a gap-down at 23,229.15, but the open and low remained at the same level, and the index rallied strongly through the session to close at 23,483.55, up 0.43%. The daily chart formed a bullish candle with no lower wick, indicating that buying emerged t from the opening tick and sustained through the day.

The rally was led by the IT index, which surged 4.23% to settle at 31,138.90, providing significant support to the broader market. Nifty managed to close above the 50% Fibonacci retracement placed near 23,400, keeping this level intact as a pivot.

However, the index continues to trade below the 20-day and 50-day SMAs, indicating that the broader short-term setup has not yet turned positive. The RSI is placed near 42, remaining below the neutral zone. The MACD stays in negative territory. India VIX dropped 7.18% to settle at 15.35, indicating a sharp decline in volatility, which supported the overall market breadth.

On the upside, sustaining above 23,550 and 23,660 could stretch the Nifty index toward higher levels. On the downside, a slip below 23,350 would bring back weakness and reopen the risk toward the previous swing low. The near-term outlook remains neutral, as today’s session' recovery providing a breather after the recent decline.

Nifty Bank settled at 53,714.65, gaining 0.13%, after testing an intraday low of 53,121.85. The daily chart formed a candle with a lower wick, indicating that the 53,000 zone acted as strong support.
The MA Ribbon on the daily chart shows all key moving averages positioned above the current price, highlighting that the index has significant ground to cover before the broader technical setup improves. The gap between the current price and the nearest MA Ribbon line at 54,300 remains wide.

The RSI is placed near 43, below the neutral zone. The MACD line remains marginally positive but continues to lose traction.

Nifty PSU Bank gained 0.55% to settle at 8,049.15, while Nifty Private Bank declined 0.22% to close at 26,011.30.

For Nifty Bank, 53,100–52,800 zone remains an important support area on the downside while on the upside, the 54,000–54,300 zone, aligned with the nearest MA Ribbon line, serves as the immediate resistance zone. The near-term outlook for the index remains cautious.