Bears continue to dominate and the market keeps extending the decline. Benchmark index Nifty 50 (22,422) lost 3.1 per cent last week, thereby posting eighth consecutive loss. Whereas Nifty Bank (54,451) was down for the sixth week as it slipped 2 per cent.

Both chart and F&O (futures and options) show downward inclination and so, the likelihood of further decline is high.

Nifty (Oct) futures (22,530) was down 3.2 per cent last week. The outstanding OI (Open Interest) of this contract increased from 104.2 lakh contracts to 191.6 lakh contracts during this period. This implies fresh short build-up.

The PCR (Put Call Ratio) of October options stood at 0.69 by the end of last week. A ratio less than 1 is because of selling (writing) of relatively more call option contracts compared to puts. This is a bearish sign as traders write calls when they are bearish.

So, the derivatives data shows a clear dominance by the bears. The chart also substantiates this as the price action indicates strong downward momentum.

The October futures breached the support at 23,000 and 22,600 last week. It marked a low of 22,321 on Thursday (Friday was market holiday) before ending the week at 22,530.

As it stands, there are no signs of a bullish reversal in trend. So, Nifty (Oct) futures might decline to the nearest support at 22,250. If this level is broken, the downtick might extend to 22,000-21,800 support band.

However, if there is a rally from the current level, the contract will face resistance at 22,600. A breakout of this can lift it to 23,000-23,125, a resistance band.

Nevertheless, as mentioned above, the derivatives data and the chart shows that the bears are in the driving seat and the probability of further decline from the current level is high.

Nifty Bank (Oct) futures (54,795) lost 2.1 per cent last week. But as the contract dropped, the outstanding OI went up from 14.2 lakh contracts to 23.5 lakh contracts. A drop in price along with an increase in OI shows fresh addition of short positions by participants.

The PCR of October options stood at 0.86 on Thursday whereas that of November contracts stood at 0.40. Thus, the option positioning by traders aligns with the bearish bias shown by the futures.

The chart shows that the negative bias is intact in Nifty Bank futures. But when compared to Nifty futures, the strength of the bears is less in Nifty Bank futures – while the former fell through the week, the latter largely remained flat in the second half despite witnessing considerable volatility.

Yet, the chances are high for further fall from the current level with the nearest notable support at 54,600. In case this support is invalidated, Nifty Bank futures can see a deeper fall to 54,000.

Instead, if Nifty Bank (Oct) futures rallies from the current level of 54,795, the barrier at 56,000 is likely to block the bulls from gaining further ground. In case this is breached, the contract can rise to 56,750.

Overall, given the prevailing conditions, the October futures is likely to decline either from the current level of 54,795 or after a minor rise to 56,000. The fall might be arrested within the broader range of 54,000-54,600.

Published on October 3, 2026