Nifty 50 (23,115) and Nifty Bank (53,427) was down 0.2 per cent and 0.6 per cent respectively over the last week. While both indices tried to overturn the trend, the attempt met with a strong resistance resulting in a decline. Here is our analysis of charts and the derivatives data of both indices:

Nifty 50

Nifty futures (March) (23,141) was down 0.3 per cent last week. During the first half, the contract rallied and made a high of 23,876 on Wednesday. However, on Thursday, it witnessed a considerable fall. Consequently, despite a recovery on Friday, the contract posted a weekly loss.

Although 23,000 is a support ahead, given the strength of the bears, we expect Nifty futures to see a further decline, potentially to 22,700. Support below 22,700 is at 22,500.

Only a decisive breakout of 24,000 can turn the outlook positive. Until then, the intermittent rises are likely to be seen as selling opportunities, leading to arrival of fresh short positions.

While Nifty futures was down 0.3 per cent for the week, the outstanding open interest of the contract saw a decline from 200 lakh contracts to 172 lakh contracts. By definition this indicates long unwinding. But from a broader picture, the data shows that some shorts have exited over the last week. This is reflected in cumulative open interest (sum of open interest of March, April and May futures) as it dropped from 242 lakh contracts to 228 lakh contracts over the last week.

Nevertheless, there are considerable shorts in the system and the strong sell-off in the second half of last week indicates that the bears retain the upper hand over the bulls.

That said, PCR (Put Call Ratio) of Nifty March options stood at 1.1 on Friday, showing some positive bias.

However, considering all the factors mentioned here, the probability of a decline remains high. 

Strategy: Last week, we suggested going short at 23,750. Retain this trade but revise the stop-loss from 24,200 to 23,500 so that some profits can be locked in. Exit the trade at 22,700. 

For fresh positions, one can wait and short Nifty futures if it inches up to 23,300. Target and stop-loss can be 22,700 and 23,500 respectively.

Nifty Bank

Nifty Bank futures (March) (53,554), like Nifty futures, saw an uptick during the first half of last week. But the rally did not sustain. While the contract made a high of 55,660 on Wednesday, what followed was a sharp decline, leading to a weekly loss of 0.7 per cent.

The contract is now trading near a support at 53,500. This base helped Nifty Bank futures rebound last week. However, we expect it to give up this time, eventually leading to a decline in the upcoming sessions. 

A breakdown below 53,500 can open the door for a fall to 51,850. If this level is breached, Nifty Bank futures can extend the decline to 50,500.

On the other hand, if the contract bounces off 53,500 again instead of breaching it, we might see a rise to 54,500 or 55,000. But for the trend to turn bullish, Nifty Bank futures should break out of 55,500.

As the March futures dropped last week, the outstanding open interest decreased too. It fell from 22.6 lakh contracts to 19.4 lakh contracts over the past week, indicating unwinding of long positions. This positioning is similar to Nifty futures.

However, unlike in Nifty futures, the cumulative open interest has marginally increased over the last week from 32.2 lakh contracts to 32.4 lakh contracts. This hints that the bears are calling the shots at a broader level. In addition, supporting the bearish inclination, the PCR of March options stood at 0.80.

So, overall, Nifty Bank futures appears weaker than Nifty futures and we expect another round of a sell-off this week.

Strategy: Last week, we recommended a short position at 55,400. Traders who are still holding it can retain the trade. Revise the stop-loss from 56,750 to 54,800. Exit at 51,850.

For fresh trades, traders can wait for a rise to 54,200 and then short the contract. Target and stop-loss can be 51,850 and 54,800 respectively.

Published on March 21, 2026