Nifty 50 (24,343) and Nifty Bank (56,566) extended the rally last week too and posted a gain of 1.2 per cent each. The chart of these indices and the futures and options (F&O) data show positive indications.

Like the preceding week, the FIIs (Foreign Institutional Investors) reduced the net short on index futures as well as on index call options, showing softening bearishness. If this continues, we are likely to see fresh long build-ups soon.

Here is our analysis of derivatives data of both Nifty 50 and Nifty Bank.

Nifty 50

Nifty futures (April) (24,368) opened with a gap-down last Monday and slipped to mark a low of 23,625. However, the contract saw an intraday recovery and in the following sessions, it breached the key barrier at 24,000.

The chart shows that Nifty futures is sustaining above 24,000, and so, further rally is highly likely. We expect it to touch 25,000 soon. A breakout of this can trigger another leg up to 25,700.

In case the base at 24,000 is breached, the contract can find support at 23,600 and 23,450, its 21-day moving average. A breakdown below the latter can turn the outlook bearish. Notable support below 23,450 is at 23,000.

The positioning of F&O traders denote bullish expectations. We have been witnessing short covering in Nifty futures since the beginning of April. While the April futures is up over 8 per cent so far this month, the outstanding Open Interest (OI) of this contract has dropped from nearly 210 lakh contracts on March 30 to 172 lakh contracts on April 17.

Supporting the bullish bias, the Put Call Ratio (PCR) of April monthly options stood at nearly 1.2 on Friday compared to 1 a week ago. An increase in the ratio is because of selling of relatively greater number of puts compared to calls over the last week. Traders sell puts when they hold a positive outlook or have no expectations of a fall from here. 

Based on the aforementioned factors, we can conclude that the probability of a rally from the current level is high. 

Strategy: Last week, we recommended buying Nifty futures (April) either on a decline to 23,600 or on a breakout of 24,200, whichever happens first. The contract, while made a low of 23,625 early last week, broke out of 24,200 on Wednesday. 

Traders who initiated longs following the breakout can hold with a stop-loss at 23,800. When Nifty futures touches 24,700, revise the stop-loss to 24,400. Book profits at 25,000.

Nifty Bank

Nifty Bank futures (April) (56,667) began last week with a gap-down and made a low of 54,606.60 on Monday before seeing a recovery. On Wednesday, it surpassed a hurdle at 56,300 and since then it has been trading above it, showing a positive bias.

A weekly close above 56,300 adds strength to the bulls and we expect them to build on this base and eventually lift Nifty Bank futures to 59,000 in the near term. A breakout of this can take the contract higher to 60,000.

However, if there is a decline which can drag the price below 56,300, Nifty Bank futures can find support at 56,000 and 55,000. That said, for the outlook to turn weak, the contract should slip below 54,000, its 21-day moving average.

Nevertheless, there has been short covering since the beginning of April. The April futures has appreciated nearly 12 per cent so far this month whereas the outstanding OI has declined from 26.1 lakh contracts on March 30 to 19.8 lakh contracts on April 17. 

Substantiating the positive inclination, the PCR of April options increased from 0.8 to nearly 1 over the last week, showing relatively greater selling of put options, a bullish sign.

So, broadly, we retain our bullish view based on the aforesaid developments.

Strategy: We had suggested buying Nifty Bank futures (April) if it breaks out of 56,300 or sees a corrective decline to 54,125. The former occurred first. 

Participants who bought Nifty Bank futures following the breakout can retain the trade. Maintain the stop-loss at 55,000. When the contract touches 58,000, move the stop-loss to 56,900. Liquidate longs at 59,000.

Published on April 18, 2026