Nifty 50 (23,623) and Nifty Bank (56,815) gained 1.1 per cent and 4.3 per cent respectively over the past week. The derivatives data suggests that the bearish sentiment seen over the previous fortnight has moderated considerably, although there is limited evidence of aggressive fresh long build-up.

FIIs (Foreign Institutional Investors) remained net short on index futures, but the position narrowed 9 per cent over the last week to 2.44 lakh contracts. They also reduced net short positions on index call options by 24 per cent to 2.09 lakh contracts. However, net long positions in index puts increased 2 per cent to 5.43 lakh contracts, indicating that institutional participants continue to maintain downside protection despite the recent rebound.

At the broader level, the positioning appears mixed. Combined net short positions (FII plus retail) on index futures increased 7 per cent to 63,223 contracts. On the other hand, net short positions on call options declined marginally from 1.89 lakh contracts to 1.86 lakh contracts, showing some moderation in bearish expectations. However, net put shorts fell sharply from 2.81 lakh contracts to 1.70 lakh contracts, suggesting that traders have become less willing to defend lower levels.

The derivatives data broadly aligns with the price action. Nifty has reclaimed an important resistance on the back of short covering , while Bank Nifty has displayed significantly stronger momentum by breaking above a key hurdle. Overall, bearishness has eased considerably but the data does not yet point to a decisive shift towards bullish positioning.

Nifty 50

Nifty futures (Jun) (23,687) opened with a gap-down last Monday and remained volatile through the week. Nevertheless, the contract largely traded sideways within the 23,150-23,400 range until Thursday.

On Friday, however, it rallied past 23,400 and closed above the resistance at 23,650. Notably, while the contract gained 1 per cent during the week, its Open Interest (OI) declined 7 per cent to 182 lakh contracts, indicating short covering.

The chart shows a key hurdle at 23,800, where a downward-sloping trendline coincides. A decisive breakout above this level can strengthen the bullish case and lift the contract to 24,150. Resistance above 24,150 is at 24,500.

On the other hand, if Nifty futures (Jun) declines from the current level, it can find support at 23,650 and 23,400. As long as the latter holds, the probability of a breakout above 23,800 will remain high.

Supporting the positive bias, the Put Call Ratio (PCR) of June options improved from 1.03 to 1.09. Although the increase was modest, it reflects relatively greater put writing, indicating a favourable sentiment among option traders.

Strategy: Go long on Nifty futures (Jun) if it breaks out of 23,800. Place stop-loss at 23,600 and book profits at 24,150.

Nifty Bank

Nifty Bank futures (Jun) (56,872) recovered swiftly after opening with a gap-down and witnessed a strong rally through the week. On Friday, the contract broke above the key hurdle at 55,800 and closed at 56,872, ending the week with a gain of 3.8 per cent.

Like Nifty futures, the rally was driven largely by short covering. As the June contract advanced last week, its OI declined 4 per cent to 24 lakh contracts. Further reinforcing the positive bias, the Put Call Ratio (PCR) of June options improved from 0.92 to 1.10, indicating that put writing outpaced call writing during the period, a bullish signal.

The chart reflects strengthening upside momentum. While the contract could witness a corrective decline from the current level, possibly towards 56,000, such dips are likely to attract buyers. We expect Nifty Bank futures to eventually resume the uptrend and move up to 58,200.

On the other hand, if the contract slips below the resistance-turned-support at 55,800, the correction could deepen towards 55,000. However, given the recent breakout and improving derivatives positioning, the probability of a sustained decline below 55,800 appears low.

Strategy: Buy Nifty Bank futures (Jun) on a dip to 56,200. Place an initial stop-loss at 55,700. When the contract rises to 57,200 and 57,800, revise the stop-loss to 56,400 and 57,200 respectively. Book profits at 58,200.

Published on June 13, 2026