Nifty 50 (23,719) and Nifty Bank (54,055) gained 0.3 per cent and 0.6 per cent, respectively, over the past week. The derivatives data suggests that the bearishness seen over the week preceding the last one has moderated, although the charts of both indices continue to show resistance at higher levels.

At the broader level, traders continue to maintain net short positions on both index futures and options, indicating that the overall market structure remains cautious. Over the last week, net short on index futures (FII and retail combined) increased 10 per cent to 63,328 contracts and net short on call options was up 21 per cent to 2,35,676 contracts.

However, there are signs that bearish conviction is easing gradually. While cumulative futures open interest increased in both Nifty and Bank Nifty during the rollover week, the rise came alongside gains in the indices, suggesting fresh long additions in the June series. More on this is discussed below. 

That said, the largely range-bound price action over the past week and the inability of both indices to overcome key resistance levels suggest that bullish confirmation is still pending. Below is an analysis of derivatives data of both indices.

Nifty 50

Nifty May futures (23,744) and Nifty June futures (23,801) were up 0.4 per cent and 0.25 per cent, respectively, over the last week. However, the outstanding Open Interest (OI) of the former dropped from 170 lakh contracts to 144 lakh contracts, whereas that of the latter rose from 33.5 lakh contracts to 91.52 lakh contracts. 

On an absolute basis, June futures has seen OI addition greater than the decline in May futures. Given that Nifty June futures was up 0.25 per cent, these factors point to a fresh long build-up. The PCR (Put Call Ratio) of Nifty May and June options stayed unchanged above 1, a positive indication.

So, while there are signs of softening bearishness, the larger picture remains negative. .

The chart shows that Nifty futures (June) has been oscillating between 23,450 and 23,950 for nearly two weeks. The 21-day moving average lies at 24,050. Therefore, the price band of 23,950-24,050 is a resistance and so long as this stays valid, the bias will remain bearish.

We expect the contract to resume the decline from the current level, breach the support at 23,450 and drop to 23,000. In case Nifty futures (June) breaks out of 24,050, the near-term outlook can turn positive, potentially leading to a rally to 24,550.

Strategy: Last week, we suggested shorting Nifty May futures at 23,800. Roll-over this trade to June contract. That is, liquidate the short position on May futures now at 23,744 and initiate fresh sell in June futures at 23,801. Target and stop-loss can be 23,000 and 24,150, respectively.

Option traders can retain long on June expiry 23,000-put contract (₹210.30) initiated at ₹250. Target and stop-loss can be ₹650 and ₹95, respectively.

Nifty Bank

Nifty Bank May futures (54,237) and Nifty Bank June futures (54,433) rose 0.7 per cent each last week. But the OI of May contract decreased from 21.8 lakh contracts to 17.5 lakh contracts, whereas the OI of June series shot up from 5.2 lakh contracts to 14.7 lakh contracts.

Therefore, like in Nifty futures, Nifty Bank futures (June) seems to have seen an addition of fresh long positions. Further, the PCR of June options increased from 0.74 to 0.94, indicating that a comparatively greater number of puts were sold last week when compared to calls. 

Therefore, recent change in derivatives positioning in Nifty Bank seems to show a bullish tilt or rather, the bears loosening some grip. However, it may be too early to call it a bullish reversal as the chart shows that there are key barriers ahead. 

For Nifty Bank futures (June), there is a resistance band ahead within the price region of 54,600-55,150. Until the barrier at 55,150 is invalidated, the bulls cannot claim to have taken control.

Also, as noted in the introduction, at a broader level, particularly the FIIs are holding net short on index futures and index call options.

Nifty Bank futures (June) is likely to resume the decline soon and fall to 51,800 in the near term. Support below 51,800 is at 51,500. But if the contract surpasses the hurdle at 55,150, it can extend the upswing to 56,750 and 57,000.

Strategy: Go short on Nifty Bank futures (June) at 54,800. Target and stop-loss can be 51,800 and 55,400, respectively.

Option traders can hold on to June expiry 52,000-put long (₹509.80) initiated at ₹600. Target and stop-loss can be ₹1,200 and ₹300, respectively.

Published on May 23, 2026