Nifty 50 (23,998) gained 0.4 per cent, whereas Nifty Bank (54,863) declined 2.2 per cent last week. The derivatives data of these indices are not aligned. While Nifty 50’s positioning indicates a mild positive bias, Nifty Bank’s data points to a bearish inclination.

Overall, FIIs (Foreign Institutional Investors) continue to maintain a bearish stance, although they have marginally reduced their short exposure. The net short positions on index futures and call options have declined, along with a reduction in net long positions in index puts (refer Change in Open Interest table).

That said, futures positioning shows a divergence, with Nifty witnessing long build-up and Nifty Bank seeing fresh short build-up, suggesting relatively stronger sentiment for the former. However, it is important to note that the market has just transitioned from April to May expiry. Hence, while these signals are valid, they may be slightly noisy at this early stage of the new series.

Here is our detailed analysis:

Nifty 50

Nifty futures (May) (24,098) was largely flat through the last week, oscillating between 24,000 and 24,430. Nevertheless, the upward bias stays as the support at 24,000 remains valid and the price is above the 21-day moving average.

We expect Nifty futures to eventually resume the rally. It can surpass the nearest hurdle at 24,430 and rise to 25,000 in the near-term.

Long build-up in futures substantiate the positive bias. As May futures gained 0.3 per cent last week, the outstanding Open Interests (OI) almost doubled to 152 lakh contracts during the period.

Put Call Ratio (PCR) of May monthly options, too, support the bulls as it stands at 1.11. A ratio greater than 1 means option traders have written (sold) more put options when compared to call options. Traders sell puts when they have neutral to positive expectations. 

Overall, the chart shows that Nifty futures is trading above key support levels and the futures and options data also gives it a positive inclination. Thus, the probability for a rally is high.

The outlook for Nifty futures will turn bearish only if it slips below the support at 23,500. Until then, the bulls will have an edge over the bears. 

Strategy: Retain long position on Nifty futures (May) that we recommended at 24,027. Maintain the stop-loss at 23,480. Going ahead, when the contract rises to 24,500 and 24,750, raise the stop-loss to 24,200 and 24,500 respectively. Book profits at 25,000.

Option traders can consider buying 24500-call of May monthly expiry. The premium closed at ₹264.85 last week. Go long at ₹250 with a stop-loss at ₹80. Target can be ₹600.

Nifty Bank

Nifty Bank futures (May) (55,195) slipped 2.2 per cent last week, declining for a second week in a row. While it made a low of 54,605 on Thursday, it managed to reclaim 55,000-mark, providing some hope for the bulls.

However, a recovery might take time as the derivatives data show bears possess relatively greater strength at the moment.

The May futures has seen a short build-up last week. That is, while it dropped 2.2 per cent, the outstanding open interest of the contract nearly doubled to 20 lakh contracts during this period.

In addition, the PCR of May options is now at nearly 0.90 because option participants have written comparatively greater number of call options than put options on Nifty Bank, a bearish sign.

Given the above factors, there is a good chance for Nifty Bank futures to witness some more moderation in price before the uptrend kicks-in. Such potential declines can be arrested by the support levels at 54,600 and 54,000. 

In case the support at 54,000 is breached, the outlook can turn bearish wherein we could see a quick fall to 52,000 and 50,500.

That said, in case there is a recovery from the current level, Nifty Bank futures ought to surpass 56,500 to establish a strong rally. If this occurs, the contract can move up to 59,000.

Strategy: Stay out for now. Go long on Nifty Bank futures (May) when it breaks out of 56,500. Place stop-loss at 55,300. When the contract rises to 58,000, raise the stop-loss to 56,900. Book profits at 59,000.

Published on May 2, 2026