Copyright thehindubusinessline
Nifty 50 (25,795) rose 0.3 per cent over the last week whereas Nifty Bank (57,700) ended the week flat. Here is an analysis of the derivatives data of both indices. For trade recommendations, November contracts are considered as October contracts will expire on Tuesday (October 28). Nifty futures (November) (25,952) was up 0.2 per cent last week. As this happened, the outstanding open interest more than doubled; it increased from 23.5 lakh contracts on October 17 to 56.3 lakh contracts on October 24. This indicates fresh long additions. With respect to options, while the Put Call Ratio (PCR) of October expiry stood at nearly 0.70 the ratio for November was at 1.30. A ratio greater than 1 for November series is a positive sign due to selling of relatively a greater number of puts than calls. Traders usually sell puts when they are bullish. Supporting the positive inclination, the chart shows that the broader uptrend is intact. However, the price action hints at a temporary drop. Going ahead, Nifty futures (November) might see a decline to 25,750 or to 25,580 before the next upswing. Once the rally resumes, the contract can surpass the prior high of 26,310 and touch 26,500. On the other hand, if the support at 25,580 is breached, it will open the door for a deeper fall, possibly to 25,400 and 25,250. That said, overall, the bull trend remains intact and the traders can use the dips to buy. Strategy: Buy if Nifty futures (November) declines to 25,750. Target and stop-loss can be 26,500 and 25,450 respectively. After the trade is initiated, once the contract rises to 26,200, trail the stop-loss to 25,850. Alternatively, one can buy November 25800-call option (₹420.55) when its premium moderates to ₹300. Target and stop-loss can be ₹650 and ₹180 respectively. Nifty Bank futures (November) (58,001) posted a marginal loss of 0.1 per cent over the past week. As the change on a weekly basis is negligible, the increase in open interest of the contract does not have any significance. Like futures, the option contracts of Nifty Bank too failed to give a definite signal as the PCR of November options contract stood at 1 on Friday. Nevertheless, the chart of Nifty Bank futures (November) retains the positive bias although there is a chance for a temporary fall in price. From the current level, the contract might see a drop to the 57,000-57,250 demand zone. Subsequent support is at 56,450. Most likely, Nifty Bank futures can rebound from the 57,000-57,250 region and establish a fresh leg of rally which can lift it to 59,000 and 60,000 in the near term. But in case the contract slips below the support at 56,450, the short-term view can turn bearish. Notable support below 56,450 is at 55,500, where a trendline might coincide. Broadly, we expect Nifty Bank futures (November) to see a drop to 57,250 and then begin the uptrend to 59,000. Strategy: Last week, we suggested buying Nifty Bank futures (October) at 58,000. As there is a chance for a correction, we suggest exiting the position at Monday’s open. After exiting, traders can wait for Nifty Bank futures (November) to drop to 57,250 before initiating fresh longs. Place stop-loss at 56,700. When the contract surpasses 58,500 after the trade is initiated, revise the stop-loss to 57,700. Book profits at 59,000. Alternatively, one can buy November 57000-call option (₹1,347.05) if its premium drops to ₹900. Target and stop-loss can be ₹1,700 and ₹500 respectively. Published on October 25, 2025
