F&O Tracker: Derivatives Favour Nifty Bank Futures

Nifty 50 (25,694) was flat last week whereas Nifty Bank (60,095) gained 1.4 per cent. Although the latter has outperformed the former, both indices retain the broader bullish outlook. Here is our analysis of the charts of futures contracts and the derivatives data.

Nifty 50

Nifty futures (January) (25,752) closed with a minor 0.1 per cent loss last week. Barring the decline to an intraday low of 25,573 on Monday, the contract was largely moving within the range of 25,670-25,930.

As it stands, there are no signs of immediate bullish reversal. The contract might fall to 25,550 or see a deeper move to 25,250 before beginning the next upswing. Once the upmove begins, Nifty futures can rally to 26,500. It can extend the rally to 27,000.

But if the contract breaches the support at 25,250, the downtrend might extend to 25,000. The support below 25,000 is at 24,500.

As Nifty futures failed to trend on either side last week, there were some exits in positions, leading to a drop in the outstanding open interest. It dropped from 169 lakh contracts to about 166 lakh contracts over the last week. But this does not hold significance given the current flat movement.

That said, the Put Call Ratio (PCR) of weekly and January monthly options stood at 0.7 and 0.8 respectively on Friday. This shows a bearish inclination as a ratio less than 1 is due to selling of relatively greater numbers of calls compared to puts.

The aforementioned factors indicate that Nifty futures can pull-back a little more before rising up.

Strategy: Stay out for now. Go long on Nifty futures (January) if it moderates to 25,550. Keep initial stop-loss at 25,200. When the contract rises to 26,000, revise the stop-loss to 25,780. Book profits at 26,500.

Nifty Bank

Nifty Bank futures (January) (60,194) gained 1.1 per cent over the last week. In the early trade on Monday, it fell and marked a low of 59,128. But the support at 59,200 aided the contract’s recovery. Friday’s rally has taken Nifty Bank futures above both 21- and 50-day moving averages.

A rebound from a support and then the price closing above important averages is a bullish indication.

Nevertheless, there is a barrier ahead at 60,500. If the bulls can lift the contract above this, it will open the door for an extension of the uptick to 61,000.

On the other hand, if there is a decline from the current level of 60,194, Nifty Bank futures can find support at 59,800 and 59,500. Only a close below 59,200 on a daily basis will turn the outlook bearish. In such a case, the contract can drop to 58,500.

But a fall looks unlikely as the support at 59,200 has held well. Also, the upward movement in January futures last week was supported by an increase in the open interest. It rose from 12 lakh contracts to 12.8 lakh contracts over the last week. This denotes fresh long build-up, though at a small scale.

Similarly, the PCR of January options stood at nearly 1.1, a positive sign.

So, the chart set-up and the positioning in the futures and options segment point to a potential rally in Nifty Bank futures from the current level.

Strategy: Last week, we suggested buying Nifty Bank futures (January) at 59,200. Hold onto this trade. Revise the stop-loss from 58,800 to 59,700. Book profits at 60,500.

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Published on January 17, 2026