Nifty 50 (25,638) and Nifty Bank (57,444) advanced 2.1 per cent each last week. The futures and options data of the indices show a bullish bias. Here’s an analysis.
Nifty 50
Nifty futures (Jul) (25,750) rallied 2.2 per cent last week. As this happened, the open interest of the contract more than doubled to 151 lakh contracts. This shows a fresh long build-up.
The Put Call Ratio (PCR) of July options stood at 1.20 on Friday. The ratio greater than 1 denotes more put option selling compared to call options. Traders sell puts when they are bullish. The PCR of the August contract stood at 1.30.
Overall, the positioning of futures and options is bullish, hinting at more upside.
Resonating with this, the chart of Nifty futures (Jul) shows a fresh breakout. The contract broke out of the resistance at 25,400 on Thursday, opening the door for further rally. We expect it to touch 26,500 soon. A breach of this can lift it to 27,000.
In case there is a decline from the current level of 25,750, it can find support at 25,400. Below this, the nearest support is 25,150, its 21-day moving average. As long as Nifty futures (Jul) remain above this, the inclination will be bullish.
Strategy: Last week, we suggested holding a long position in Nifty futures (Jun) and roll-over the same to July contract before the expiry of June contracts. Retain the buy position in July futures.
While the price at which the contract was rolled can vary depending on when it was done, one can maintain a stop-loss at 25,300. Raise this to 25,700 when the contract surpasses 26,000. Book profits at 26,500.
Nifty Bank
Nifty Bank futures (Jul) (57,648) rallied 2.1 per cent last week. The open interest of this contract more than quintupled and it stood at 23 lakh contracts on Friday. This denotes a fresh long build-up.
The PCR of July and August contracts stood at 1.10 and 2.20 respectively on Friday. So, the option positioning too shows a bullish bias. Thus, the derivatives data of Nifty Bank shows a clear positive directional bias.
That said, the chart shows that Nifty Bank futures (Jul) is approaching a resistance band, which is the 57,800-58,000 price range. While the broader trend continues to be bullish, we might see a minor price correction.
Such a correction can drag the contract to 57,000. Post this move, we expect Nifty Bank futures to begin another leg of a rally.
A breakout of 58,000, either from the current level or after the corrective decline to 57,000, can take the contract to 60,000. Although 59,000 is a minor hurdle, given the current momentum, we expect the bulls to ease past this level.
On the other hand, if Nifty Bank futures (Jul) slips below the support at 56,800, where the 23.6 per cent Fibonacci retracement coincides, the downswing may extend to 56,300.
However, as it stands, the bulls are in control and the rally to 60,000 is likely to occur.
Strategy: Last week, we suggested buying Nifty Bank futures (Jul) at an average price of 56,330. The revised stop-loss would now be at 56,800 as the contract surpassed 57,300.
As the contract marked a high of 57,669 on Friday, it fell short of hitting the target at 57,800. Since there is a resistance at 57,800/58,000, traders can exit this position at the current level.
After this, traders can buy Nifty Bank futures (Jul) again if it breaks out of 58,000. Target and stop-loss can be 60,000 and 57,000.
But instead of a breakout if there is a decline from the current level, go long when the contract dips to 57,000 and place a stop-loss at 56,300. Target can be 60,000. Post initiating this trade, stop-loss can be revised higher to 57,000 when Nifty Bank futures (Jul) surpasses 58,000.
With respect to options, exit the 58,000-call long position (initiated at ₹397) at the current level of ₹706. Consider buying an at-the-money call option again after Nifty Bank futures (Jul) breaks out of 58,000 or after it dips to 57,000, whichever happens first. Target and stop-loss can be based on the movement of Nifty Bank futures (Jul) as mentioned above.
Published on June 28, 2025
