Nifty 50 (22,553) appreciated 1.9 per cent and Nifty Bank (48,498) was up by 0.3 per cent over the last week. Here is an analysis of the derivatives data of both indices.
Nifty 50
Nifty futures (March) (22,650) declined in the early part of last week and marked a low of 22,101. However, it saw a good recovery since Wednesday and posted a gain of 1.7 per cent for the week.
As the contract closed higher on a weekly basis, the cumulative Open Interest (OI) saw an increase as well. The outstanding OI of Nifty futures across expiries went up 4 per cent for the week and stood at 201 lakh contracts on Friday. So, there was some long build-up.
While the aforesaid is a positive indication, the chart of Nifty futures shows that it remains below key resistance levels to call last week’s uptick a bullish reversal. From the current level of 22,650, there are barriers at 22,850 and 23,200.
At 23,200, the 50-day moving average coincides. In addition, the upper boundary of a falling channel, within which Nifty futures has been moving since the beginning of this year, also lies at 23,200, making it a critical level. Only if the contract tops this, the outlook can turn positive.
We expect the downtrend to resume, either from the current level or after the upswing extending to 22,850. Such a fall can drag the contract to 21,830, a support. A breach of this can lead to a decline to 21,150.
In case Nifty futures extends the recovery and surpasses the resistance at 23,200, it can move up to 23,850, the nearest notable barrier above 23,200. Nevertheless, as it stands, the bearish bias exists.
Strategy: We recommended shorting Nifty futures (March) at 22,600 with a stop-loss at 22,950. Hold on to this trade as the trend has not turned bullish yet. When the contract drops to 22,200, bring the stop-loss down to 22,500. Exit at 21,830.
As an alternative, we suggested buying March 22600-put at ₹280. Retain this position with a stop-loss at ₹120. When the premium goes up to ₹500, trail the stop-loss to ₹350. Liquidate the trade at ₹700.
Nifty Bank
Nifty Bank futures (March) (48,680) closed last week higher by a marginal 0.1 per cent. The cumulative OI of futures across expiries also increased. It was up 5 per cent last week as the outstanding OI stood at 39.4 lakh contracts on Friday.
Although the contract gained marginally, the intraweek price action shows that Nifty Bank futures was largely flat. So, it continues to trade within the broad range of 48,000-49,800. This has been true since early 2025.
Within this broader price band, Nifty Bank futures has a resistance ahead at 49,000. In case the contract rises above this level and breaks out of 49,800, it can rally to 50,800. A breach of this can turn the outlook positive. Resistance above 50,800 is at 54,000.
On the other hand, if Nifty Bank futures slips below the support at 48,000, it can fall to 46,000. Note that the price band of 46,000-46,200 is a support. Subsequent support is at 44,000.
Overall, the path of the next leg of trend depends on the direction of the break of the 48,000-49,800 range.
Strategy: Traders can refrain from trading as Nifty Bank futures lie in a range.
Halt fresh trade
Trend remains bearish for Nifty futures
Hold on to Nifty futures short position
Avoid fresh trades in Nifty Bank futures
