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The Week That Was:

• Nifty futures closed 8.4% (1933.5 points) higher at 25032.4 on Friday, shedding 29.82 lakh shares to total 139.36 lakh open interest (down 17.6%), confirming a short covering that points to near-term short covering.

• Bank Nifty futures closed 7.6% (4156.0 points) higher at 58979.4 on Friday, adding 0.09 lakh shares to total 23.81 lakh open interest (up 0.4%), confirming a long buildup that reflects robust bullish continuation sentiment.

• India VIX rose 0.6% to 13.05% indicating a marginal uptick in market volatility prompting traders to maintain a cautiously optimistic outlook ahead.

• FII Long-Short ratio (index futures) increased from 0.13 to 0.33, with index Longs at 48,656 contracts and Shorts at 1,49,072; Short positions outweigh Longs, reflecting the prevailing positioning.

Nifty Open Interest Put-Call Ratio

• Nifty Put-Call Ratio (PCR) surged 0.05 week-on-week as heavy call unwinding outpaced put liquidation to yield net-positive put additions, signaling aggressive short-covering alongside firm downside put underwriting that supports a buy-on-dips bullish momentum regime.

Volatility Analysis

• The IV curve witnessed a clear bullish rotation WoW, with ATM IV declining from 14.3 to 12.8 and 95% OTM put IV easing from 17.4 to 15.7, indicating reduced demand for downside protection. However, the downside skew persists at a 2.8-point premium over ATM IV..

• Conversely, 102.5% and 105% OTM call IVs rose to 13.9 and 13.4, respectively, signalling increased upside demand. The shift from downside hedging to upside positioning reflects a more bullish, risk-seeking market outlook.

Nifty Open Interest Concentration (Monthly)

• Nifty options positioning indicates strong support at 24,500 (Put OI: 50.7L), while 25,000 (Call OI: 50.7L) acts as immediate resistance, with maximum OI concentrated at both strikes.

• The 25,000-strike Put also witnessed significant OI concentration of 32.4L, reinforcing its importance as a crucial pivot.

• Nifty is expected to trade within the 24,500–25,000 range, with the 25,000 level likely to dictate the next directional momentum.

Bank Nifty Open Interest Concentration (Monthly)

• Bank Nifty options positioning indicates firm support at 57,000 (Put OI: 13.4L), while 58,000 remains the key pivot, holding maximum Call OI of 20.7L and Put OI of 18.6L.

• The heavy OI concentration at 58,000 indicates strong consolidation around this level.

• Bank Nifty is expected to remain rangebound around 57,000–58,000, with a decisive breakout above 58,000 likely to dictate the next directional move

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