Nifty 50 (23,898) and Nifty Bank (56,090) snapped a two week rally as both indices fell last week. While the former lost 1.8 per cent the latter was down 0.8 per cent.

The FIIs (Foreign Institutional Investors) increased their bearish exposure over the past week by adding net short on index futures and index call options and by adding net long on index put options. 

Broadly, at the moment, the derivatives data indicate some weakness whereas the chart shows that the correction may be temporary. Below is our analysis.

Note that derivative contracts from May series are considered since April contracts will expire on Tuesday (April 28).

Nifty 50

Nifty futures (May) (24,027) rallied in the first half of last week and hit a six-week high of 24,738.2 on Tuesday. However, the contract turned south and fell in the following sessions, losing 1.9 per cent for the week. 

Nevertheless, the contract managed to close above the 24,000-mark. In fact, the outlook will turn bearish again only if May futures slips below the key support at 23,600. 

We expect Nifty futures (May) to resume the rally either from the current level of 24,027 or it might see the correction extend to 23,600 and then establish the next uptrend. Once the rally restarts, the contract can rise to 25,000.

However, if the support at 23,600 is breached, the immediate outlook can become bearish and Nifty futures (May) might decline to 23,000. Support below 23,000 is at 22,500.

Notably, as the May futures fell last week, the outstanding Open Interest (OI) of the contract tripled to nearly 77 lakh contracts. This denotes short build-up.

But the Put Call Ratio (PCR) of April options stood at 1.1 on Friday. A ratio above 1 is because of selling of relatively greater number of puts when compared to calls, a positive sign.

Overall, certain elements of the data analysed point to weakness whereas the chart shows that key support levels are holding up well until now. Hence, traders ought to tread carefully.

Strategy: A couple of weeks ago, we had recommended buying Nifty futures (April) on a breakout of 24,200 with target and stop-loss at 25,000 and 23,800 respectively. 

Since the April futures is nearing expiry, we suggest rolling over the longs to May futures – exit the former now at 23,923 and buy the latter now at 24,027. 

Taking into account the possibility of a deeper correction to 23,600 in May futures, we suggest placing stop-loss at 23,580. 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.

Nifty Bank

Nifty Bank futures (May) (56,453) rose to mark a six-week high of 57,889.60 last Wednesday before declining to end the week at 56,453 thereby posting a loss of 0.8 per cent.

But the bulls successfully defended the 56,250 support. The price band of 56,250-56,000 is a good base. Even if this level is taken out, for the trend to turn negative, Nifty Bank futures (May) must break down below 55,000.

We anticipate the recovery to happen anywhere within the broad price range of 55,000-56,250. A potential upswing can then lift the contract to 59,000 quickly. A rally past 59,000 can lift it to 60,000.

On the contrary, if Nifty Bank futures (May) drops below the support at 55,000, it will open the door for a decline to 52,500 or even to 51,000.

The futures positioning supports the bearish bias as there has been short build-up last week i.e., as the May futures was down, the outstanding OI doubled to 10.6 lakh contracts.

Also, the PCR of May options stood at 0.90 on Friday. A ratio less than 1 is because of selling of relatively greater number of call options, a bearish signal. 

While the futures and options data indicate weakness, the chart shows that certain key support levels are still valid and in fact, the recent price action suggests that Nifty Bank futures might rebound before Nifty futures. 

Strategy: A couple of weeks or so ago, we had suggested buying Nifty Bank futures (April) on a breakout of 56,300. Recommended target and stop-loss levels were 59,000 and 55,000 respectively.

As the April contracts are set to expire on Tuesday, participants can roll-over the longs as the support levels have not given up yet. That is, exit April futures now at 56,207 and go long on May futures now at 56,453 with a stop-loss at 54,950.

When the contract rallies to 58,000, revise the stop-loss to 56,900. Book profits at 59,000.

Published on April 25, 2026