Increased Short Positions Observed in Nifty Futures and Nifty Bank Futures, According to F&O Tracker
As we enter early August 2025, the financial markets are presenting an interesting mix of bullish and bearish tendencies. While Nifty 50 futures exhibit a combination of bullish and range-bound elements, Bank Nifty shows bearish indicators.
For Nifty 50 futures, a bullish Iron Condor options strategy is recommended, reflecting the expectation of a tight range with a slight bullish bias around the 24,650–25,000 zone through the August expiry. This strategy benefits from range-bound price action with limited breakout risk, involving selling put spreads closer and call spreads wider to profit from premium decay if the market remains within the range near 24,680 to 25,000.
Technical indicators suggest key support in the 24,500–24,600 area, supported by a bullish harmonic pattern and bullish RSI divergence on hourly charts. Dips near 24,650 offer good entry points for long futures positions, with resistance lying at 25,000 to 25,200. Stop-losses around 24,450–24,550 are advised to manage risk.
Recent price action showed bearish engulfing patterns and selling pressure around 24,700–24,750, indicating some caution, but the technical outlook remains constructive for a recovery above support if confirmed.
Bank Nifty, on the other hand, shows bearish candles and resistance around 56,100, with a close near 55,700. The general tone is cautious as it tries to hold support around 55,700–55,900 zones. Traders should monitor for breakouts or breakdowns outside these zones to adjust or exit strategies accordingly.
Notable resistance levels above 57,000 for Bank Nifty are at 57,500 and 58,000, while a breach of the support at 55,500 can open the door for a decline to 54,500.
In the options market, the Put Call Ratio (PCR) of August expiry options for Nifty Bank stood at 0.9, while the PCR of weekly options for Nifty 50 stood at nearly 0.60, indicating a greater number of call option selling. Open Interest (OI) for Nifty 50 futures (Aug) increased from 74 lakh contracts on July 25 to 169 lakh contracts on August 1, indicating a fresh short build-up.
For a better-risk reward ratio, instead of shorting Nifty Bank futures (Aug) now, traders can wait for it to rise to 56,200 and then sell. Similarly, for Nifty 50 futures (Aug), holding on to long positions initiated at 24,700 with a stop-loss at 24,500 is advised, with the stop-loss revised at 24,800 when the contract touches 25,000, and profits can be booked at 25,200.
If the support at 24,600 fails for Nifty 50 futures, a further decline is possible, with potential support levels at 24,200 and 24,000. In this case, traders can short Nifty 50 futures below 24,500 with a stop-loss at 24,800 for a target of 24,000.
In summary, the current trading strategy for Nifty 50 futures combines bullish and range-bound elements, while Bank Nifty shows bearish tendencies with key support levels closely watched. Traders should monitor these trends closely and adjust their strategies accordingly to capitalise on the market movements.
- Given the bullish Iron Condor options strategy recommended for Nifty 50 futures, investors considering a subscription to premium financial analysis services might find it beneficial to stay informed about stock-market trading and investing opportunities within the specified range.
- With the general tone for Bank Nifty being cautious, it would be prudent for a business to manage any trade related to bank stocks carefully by keeping a close watch on breakouts or breakdowns, and potentially adjusting or exiting strategies based on the movement.
- In the context of the options market, a trader keeping track of the Put Call Ratio (PCR) and Open Interest (OI) could gain an edge by conducting a thorough analysis of these indicators, as they can offer insights into the sentiments of market participants and potential trade opportunities.
- As the support at 24,600 for Nifty 50 futures represents a significant level in the current trading strategy, it is essential for investors involved in the stock-market to carefully consider their risk management, with stop-losses and potential support levels accounting for their investing decisions.
