Nifty 50 (24,013) and Nifty Bank (57,686) gained 1.7 per cent and 1.5 per cent respectively over the past week, extending their recovery for a second consecutive week. The derivatives data suggests that the rebound is gaining traction, although it continues to be driven largely by short covering rather than aggressive fresh long additions.

FIIs (Foreign Institutional Investors) remained net short on index futures, although the position narrowed 7 per cent over the last week to 2.3 lakh contracts. However, they increased net short positions on index call options by 44 per cent to 3 lakh contracts and raised net long positions in index puts by 16 per cent to 6.3 lakh contracts. This suggests that while FIIs reduced some bearish futures exposure, they continued to maintain a cautious stance through the options segment.

At the broader level, the positioning appears relatively stable. Combined net short positions on index futures increased marginally from 63,223 contracts to 64,138 contracts. On the other hand, net short positions on call options declined 17 per cent to 1.55 lakh contracts. Net put shorts, too, reduced from 1.70 lakh contracts to 1.48 lakh contracts, suggesting that bearish conviction among traders has eased further.

The derivatives data broadly mirrors the recent price action. Both Nifty and Nifty Bank have extended their recovery, with the former breaking above a key resistance level and the latter building on the breakout witnessed during the week before the last one. Overall, market sentiment has improved, although the continued defensive positioning of FIIs suggests that foreign investors remain cautious.

Nifty 50

Nifty futures (Jun) (24,057) began last week with a gap-up above the resistance at 23,800. The contract extended the gains and hit a high of 24,210 on Thursday before easing on Friday to close the week at 24,057.

The rally was driven largely by short covering for the second consecutive week. While Nifty June futures gained 1.6 per cent during the week, its open interest declined 9 per cent to nearly 165 lakh contracts.

Despite Friday’s correction, the contract continues to trade above the key support levels of 23,900 and 23,800. The 21-day moving average is currently at 23,700 and as long as this level remains intact, the near-term outlook will stay positive.

We expect Nifty futures (Jun) to resume the rally either from the current level or after a brief corrective decline. Such an up move can take the contract to 24,380. A breakout above this level can extend the rally to 24,550, where profit-booking could emerge.

On the other hand, if the contract breaks below the support at 23,700, it can decline to 23,500 and subsequently to 23,300. However, given the prevailing price action and improving sentiment, the bias remains bullish.

Strategy: Go long on Nifty futures (Jun) if it declines to 23,900. Place stop-loss at 23,650 and book profits at 24,500.

Alternatively, if the contract does not witness a dip and breaks above 24,210, traders can initiate fresh longs with a stop-loss at 24,000. Book profits at 24,500.

Nifty Bank

Nifty Bank futures (Jun) (57,862), like Nifty futures, opened with a gap-up last Monday. Although the contract surrendered part of the gains during the session, it regained momentum in the subsequent days and touched a high of 58,049 before settling at 57,862 on Friday.

The rally was supported by short covering. While Nifty Bank June futures advanced 1.7 per cent last week, its open interest (OI) declined 13 per cent to 20.8 lakh contracts.

The chart continues to reflect a positive bias. Although the contract could witness a corrective decline in the near term, the outlook will remain bullish as long as the support at 56,600 stays valid. A rally, either from the current level or after a minor dip, can lift Nifty Bank futures (Jun) to 59,000. Resistance above this level is at 60,000.

On the other hand, if the contract slips below 56,600, the bears could regain some traction. Such a breakdown can drag Nifty Bank futures towards 55,600, where the 21-day and 50-day moving averages converge.

Nevertheless, the prevailing price structure remains favourable for the bulls.

Strategy: Buy Nifty Bank futures (Jun) on a dip to 57,200. Place an initial stop-loss at 56,400. When the contract rises to 58,200 and 58,750, revise the stop-loss to 57,800 and 58,400 respectively. Book profits at 59,000.

Alternatively, if Nifty Bank futures (Jun) breaks above 58,100 without seeing a dip, traders can initiate fresh longs with a stop-loss at 57,750. Book profits at 59,000.

Published on June 20, 2026