F&O Tracker: Nifty futures & Nifty Bank futures could see higher volatility

Nifty 50 (25,321) and Nifty Bank (59,610) appreciated 1.1 per cent and 1.9 per cent respectively. While the futures and options data give some positive bias, one needs to be cautious about potentially higher volatility because of the Budget announcement. Here is is our analysis:

Nifty 50

Nifty futures (February) (25,416) gained 0.8 per cent last week. Nevertheless, the price action over the past week shows that it has been oscillating in a range. The chart shows that it is now trading between 25,100 and 25,550.

If the contract breaks out of the resistance at 25,550, it can rally. But there are resistance levels ahead at 25,880 and 26,000. A decisive breakout of the latter can result in a sustainable rally, which can take Nifty futures to 26,600.

On the other hand, if the contract slips below the support at 25,100, it can extend the decline to 25,000, a notable support. A breach of this base can drag Nifty futures to 24,500.

Derivatives: As Nifty futures (February) rose 0.8 per cent, its open interest increased. It went up from 117 lakh contracts to a little over 182 lakh contracts over the last week. A rally in contract along with open interest going up denotes fresh long build-up, a positive sign.

In line with futures, the Put Call Ratio (PCR) of February monthly options hints at some positivity as it stood at 1.1 on Friday. A ratio greater than 1 is because of the relatively greater number of put options selling compared to calls. Traders sell puts when they are bullish.

That said, note that the PCR of the weekly expiry (February 3 expiry) options stood at 0.75, showing some weakness.

But overall, the derivatives data give some positive bias but the chart shows that there is a barrier ahead which the bulls ought to breach to build a sustainable rally.

Nifty Bank

Nifty Bank futures (February) (59,909) was up 1.8 per cent last week.  While it outperformed Nifty futures and rose, the rally was capped by a trendline resistance at 60,250.

Going ahead, if Nifty Bank futures can breach the barrier at 60,250, it can extend the upswing to 60,500 and even to 61,000, notable resistance levels.

On the other hand, if the contract slips from the current level, it can find support at 59,500. But a breach of this can result in a deeper fall. Nearest notable support below 59,500 is at 58,500.

Derivatives: The February futures rose 1.8 per cent last week and along with this, the open interest went up. Over the past week, the open interest of this contract increased from 9.7 lakh contracts to 13.3 lakh contracts. This implies long build-up.

The PCR of February options on Nifty Bank stood at 1.05 on Friday. So, the amount of selling in call options and put options are nearly the same and so, the options don’t give a definite bias at the moment.

Broadly, it can be considered that the derivatives data on Nifty Bank futures show slight positive bias. However, as per the chart, there are resistances ahead, which can limit the upside.

Published on January 31, 2026