Nifty 50 (23,141) and Nifty Bank (55,580) fell 0.9 per cent and 1.4 per cent, respectively. While the former posted a seventh consecutive weekly decline, the latter is down for five weeks straight.

While the momentum is strongly in favour of the bears, which is supported by the futures and options data, a relief rally is likely to occur after a long downswing. Supporting this, the chart shows that both indices are now hovering near a notable support.

Nifty (Oct) futures (23,264) slipped 0.9 per cent along with an increase in outstanding Open Interest (OI) by 164 per cent to 104.2 lakh contracts during the past week. While this indicates a considerable short build-up, part of the increase in OI can be attributed to rollover of positions as September contracts expire on Tuesday (September 29).

The cumulative OI (combining September, October and November futures) stood at 249 lakh contracts on Friday, the highest since March 30 when it was 307 lakh contracts. Note that the trend turned bullish after March 30.

The Put Call Ratio (PCR) of October contract remained at 1.1 on Friday. A ratio above 1 in the October series shows a positive bias as traders have sold relatively a greater number of put options compared to call options. Participants sell puts when they are bullish.

Together, the derivatives data do not give a definite signal.

That said, the chart set-up is what gives the bulls some hope. Although the downward momentum is strong, the chart of the underlying Nifty 50 index shows that there is a support at 23,000. The equivalent level in October futures is 23,100. 

If there is a recovery on the back of this, Nifty (Oct) futures can see an uptick to 23,650. A breach of this can take it to 23,725. However, if the support at 23,100 is breached, the contract can fall to 22,700.

Strategy: Buy Nifty (Oct) futures now at 23,264. Place stop-loss at 23,000. Book profits at 23,650.

Option traders can buy Oct expiry 23,500-call option (₹190.10). Go long now at ₹190. Target and stop-loss can be ₹370 and ₹100, respectively.

Risk-averse traders can avoid this since this is a counter-trend position and also the risk-reward ratio is not very attractive.

Nifty Bank (Oct) futures (55,963) lost 1.5 per cent last week. But OI shot up 325 per cent to 14.2 lakh contracts, with a part of the increase due to the rollover of trades.

The cumulative OI stood at 31.4 lakh contracts on Friday, the highest since June 29 and March 30 where it was 31.7 lakh contracts and 36.4 lakh contracts, respectively. The index rallied after March 30.

The PCR of October options stood at 0.9 on Friday. But it had increased from 0.6 a week back. This shows that during last week, traders sold more puts compared with calls.

The derivatives data, like in Nifty 50, do not show a clear inclination in Nifty Bank too.

The chart of Nifty Bank shows that the support at 55,300 is a considerable base. While a bullish trend reversal might not occur, there could be a temporary rally in the index and the futures.

The support for Nifty Bank (Oct) futures is at 55,700. A rebound against this can lift it to 57,000. Instead, if the contract breaches the support at 55,700, the downtrend is likely to be extended to 55,000 and subsequently to 54,750.

Strategy: Traders can buy Nifty Bank (Oct) futures now at 55,963. Keep initial stop-loss at 55,500. Book profits at 56,900.

Option traders can buy Oct expiry 56,500-call option (₹602.10). Go long at ₹600. Target and stop-loss can be ₹1,100 and ₹350, respectively.

Risk-averse traders can stay out.

Published on September 26, 2026