Nifty 50 (24,384) and Nifty Bank (57,265) gained 2.6 per cent and 1 per cent, respectively, last week, recovering from the sharp correction seen in the previous week. The rebound was accompanied by a notable improvement in derivatives positioning, indicating that bearish bets were unwound and sentiment turned more constructive.Foreign Institutional Investors (FIIs) turned less bearish. Their net short position in index futures narrowed 36 per cent to 1.73 lakh contracts from 2.71 lakh contracts. Net short positions in index call options also declined 29 per cent to 1.85 lakh contracts from 2.59 lakh contracts, while net long positions in index puts eased 15 per cent to 4.54 lakh contracts. Taken together, the derivatives positioning suggests that institutional investors have pared bearish bets after last week’s sell-off.The broader positioning also improved. Combined FII-retail net short positions in index futures more than halved to 45,189 contracts from 94,349 contracts. Net short positions in index call options declined 25 per cent to 1.60 lakh contracts. Meanwhile, net put shorts increased 39 per cent to 2.34 lakh contracts from 1.68 lakh contracts, indicating that put writers have become more aggressive, reflecting improving confidence in the market.The options data corroborates the positive undertone. The Put Call Ratio (PCR) of Nifty August options improved to 1.14 from 1.05, while that of the September series stood at a healthy 1.41. Bank Nifty’s August PCR also improved marginally to 0.86 from 0.83, whereas the September series stood at 1.59.Overall, the derivatives data point to a clear improvement in sentiment. However, surpassing the key resistance levels ahead will be crucial for the bulls to extend the ongoing recovery.Nifty 50Nifty futures (Aug) (24,453) opened with a gap-up last Monday and extended the rally through the week. As this happened, the outstanding open interest expanded 60 per cent to nearly 131 lakh contracts, indicating fresh long build-up. Also, the PCR of Nifty August options stood at 1.14 on Friday.So, broadly, the derivatives data point to a bullish inclination.However, the chart shows that the August futures faces a barrier at 24,600. For a sustainable rally, the contract ought to break out of this level.A breach of 24,600 can open the door for a rally to 25,000. Potential resistance above 25,000 is at 25,250. However, if Nifty futures declines from the current level of 24,453, it can find support at 24,240, its 21-day moving average. Subsequent support is at 24,000.Nevertheless, as it stands, there is a clear positive bias. A breakout of 24,600 will add considerable strength for the rally. Hence, we suggest traders wait for the same.Strategy: Buy Nifty futures (Aug) if it breaks out of 24,600. Place initial stop-loss at 24,400. When the contract rises to 24,800 and 24,900, tighten the stop-loss to 24,680 and 24,800 respectively. Book profits at 25,000.Nifty BankNifty Bank futures (Aug) (57,425), too, opened last Monday with a gap-up. However, unlike Nifty futures, there was no follow-through rally here. Instead, through the week, the contract was trading in the sideways range of 57,000-57,600. Nevertheless, the August futures posted a weekly gain of 0.6 per cent. Since its open interest surged 55 per cent over the week to 21.2 lakh contracts, it indicates fresh long build-up.With respect to options, the PCR of August contracts stood at 0.86. Although it is less than 1, there was a marginal increase over the past week, denoting relatively-greater put option selling, a mild positive signal.Overall, the futures and options data are supportive for the bulls.However, the chart shows that Nifty Bank futures (Aug) faces a resistance at 58,000. This hurdle should be invalidated for the contract to establish a reliable trend. A breakout above 58,000 can lift the contract to 60,000.On the other hand, if there is a decline from the current level of 57,425, the contract can slip to 57,000 and 56,500.Overall, the derivatives positioning and the chart set-up shows that Nifty Bank futures is not as bullish as Nifty futures. So, traders need to wait for a clear signal before pulling the trigger. Strategy: Buy Nifty Bank futures (Aug) if it breaks out of 58,000 and place a stop-loss at 57,000. When the contract rallies to 59,000 and 59,500, raise the stop-loss to 58,250 and 59,000 respectively. Book profits at 60,000.Published on August 1, 2026