Data show that FIIs (Foreign Institutional Investors) are not adding to short positions. In fact, there has been a marginal reduction in net shorts on index futures and, by cutting net long positions in puts, they have reduced downside hedges.
On the other hand, retail participants continue to exhibit a bullish bias as they hold net long positions in index futures and calls.
Overall, while FIIs have pared some bearish bets and retail traders remain constructive, this does not confirm a bullish reversal. A sustained uptrend would require fresh long build-up.
Here is our analysis of Nifty 50 and Nifty Bank derivatives along with trade recommendation.
Nifty 50
Nifty futures (April) (22,767) declined 0.6 per cent last week, a truncated one with only three trading sessions. For the second consecutive week, the contract has closed below the key support at 23,000. As long as this level remains unbroken on the upside, the bias will stay bearish.
A continuation of the decline from the current level of 22,767 can drag Nifty futures towards the 22,100–22,000 support band. However, if the contract manages to break above 23,000, the upswing could extend to 23,700, where the 21-day moving average coincides.
That said, futures positioning indicates fresh short build-up, suggesting that a recovery may not be immediate. As Nifty April futures fell 0.6 per cent last week, Open Interest (OI) rose sharply from 143 lakh contracts to 214 lakh contracts.
On the options front, the Put-Call Ratio (PCR) stands at 1, indicating a broadly neutral stance. However, at the strike level, the 23,000-call holds the highest outstanding OI, suggesting that market participants expect any recovery to face resistance around this level.
Although the 23,000-put also has notable participation, the prevailing short build-up in futures and resistance near 23,000 imply that reclaiming this level may be challenging.
Other put strikes with significant OI include 22,500 and 22,000, making them potential support levels. These also align with the demand zone indicated by price action. Hence, there is a possibility of Nifty futures finding a base in the 22,100–22,000 region.
Strategy: Short Nifty futures (April) at 22,900. Place stop-loss at 23,200. Revise the stop-loss to 22,550 when the contract falls to 22,300. Book profits at 22,100.
Nifty Bank
Nifty Bank futures (April) (51,818) declined 1.4 per cent last week. It closed below the support at 52,500, indicating that bears remain in control. Although the contract recovered partially from the sharp fall seen early in the week, there are no clear signs of a bullish reversal.
Importantly, the contract has seen fresh short build-up. As it declined 1.4 per cent last week, open interest increased from 18 lakh contracts to 24.7 lakh contracts.
The PCR of April options stood at 0.86 at the end of last week. A ratio below 1 indicates relatively higher call writing compared to puts, suggesting a bearish bias.
Call option strikes with high OI include 52,000, 53,000 and 54,000, which can act as resistance levels. On the downside, the 51,000 and 50,000 put strikes have considerable OI and may offer support.
Overall, the bias remains bearish and Nifty Bank futures may see another leg of decline before any meaningful trend reversal.
Strategy: Short Nifty Bank futures (April) at 52,600. Place stop-loss at 54,000. Book profits at 50,000.
Published on April 4, 2026