Range Bound

A range-bound market or stock is one in which the price oscillates repeatedly between a well-defined upper resistance level and a lower support level, without making sustained directional moves above resistance or below support. Range-bound conditions occur when buying and selling forces are roughly balanced — there is no dominant trend in either direction, and the market is consolidating after a prior move. Technical analysts identify range-bound conditions using horizontal support and resistance levels, Bollinger Bands contracting to indicate low volatility, and ADX (Average Directional Index) readings below 20. In Indian equity markets, Nifty 50 often enters range-bound phases ahead of major macro events such as elections or RBI policy meetings, as traders await directional clarity before committing to large positions. Range-bound trading strategies involve buying near support and selling near resistance — the opposite approach to breakout trading. A confirmed breakout above resistance or below support signals the end of the range-bound phase.