Nifty 50 (26,329) and Nifty Bank (60,151) appreciated 1.1 per cent and 1.9 per cent respectively over the last week. The charts and the derivatives data point to further upside from here. Here is our analysis.
Nifty 50
Nifty futures (January) (26,478), which saw a decline early last week, found support at 26,050 and rebounded. It then rallied and posted a weekly gain of 0.9 per cent.
The chart shows that the contract has formed higher high and higher low. Although there might be a chance for some moderation, the broader uptrend is intact. We expect Nifty futures to surpass a hurdle at 26,500 and touch 27,000 in the near term.
In case the correction extends beyond 26,250, the decline can go deeper to 26,050. That said, the outlook will turn bearish only if the support at 26,000 is breached, which is less likely to happen.
Supporting the positive bias in January Nifty futures, the uptick in price was accompanied by an increase in open interest. It increased from 55 lakh contracts to 139 lakh contracts in the last week. This implies fresh long build-up.
Also, the Put Call Ratio (PCR) of Nifty weekly and monthly options stood at 1.6 and 1.1 respectively. A ratio greater than 1 is due to relatively greater selling of puts when compared to calls. This denotes bullish positioning by option traders.
Broadly, the chart and futures and options give an optimistic outlook for Nifty futures. Therefore, traders can take positions accordingly.
Strategy: We had suggested buying Nifty futures (January) at 26,235. Hold on to this trade. But raise the stop-loss from 25,900 to 26,220. When the contract touches 26,800, tighten the stop-loss to 26,600. Target can be 27,000.
Traders who bought 26500-call option (January) (recommended at ₹150) can also retain the trade. It closed at ₹218.80 on Friday. Revise the stop-loss from ₹70 to ₹130. Exit at ₹380.
Nifty Bank
Nifty Bank futures (January) (60,390) opened last week on the back foot and declined on Monday. But since Tuesday, after finding support at 59,250, it has been moving up. The contract decisively broke out of the hurdle at 60,000 on Friday, a positive sign.
From the current level of 60,390, we expect Nifty Bank futures to rally to 60,750. But before that, there might be a minor correction, probably to 60,000. The potential upswing that follows might extend beyond 60,750 to touch 61,000.
On the other hand, if there is a decline beyond 60,000, the contract can slip to 59,750. But a breach of this level is unlikely to happen.
As January Nifty Bank futures rose last week, the open interest also went up. It more than doubled from 6.2 lakh contracts to 14.2 lakh contracts, showing the arrival of fresh long positions.
Along the same lines, the option positioning also gives a positive outlook. The PCR of January month options stood at 1.1 on Friday.
Overall, the prevailing chart set-up and derivatives data hint at further upside in Nifty Bank futures. Hence, traders can remain on the long side of the trade.
Strategy: Last week, we suggested buying Nifty Bank futures (January) at 59,430 with a stop-loss at 59,250. As the contract marked a low of 59,179 on Tuesday before recovering to the current level of 60,390, the stop-loss would have been hit.
Traders can still consider longs but only on a decline to 60,100. Target and stop-loss can be 60,950 and 59,700.
Traders who bought January 60000-call at ₹450 can hold on to the position. It closed at ₹820.90 on Friday. Revise the stop-loss from ₹250 to ₹600. Book profits at ₹900.
Published on January 3, 2026
