Nifty, Bank Nifty outlook: Avoid fresh longs; check key support & resistance levels
HDFC Securities advises caution on Nifty and Bank Nifty as derivative data turns bearish. Check key support, resistance levels, FII positioning and outlook.
- Jul 27, 2026,
- Updated Jul 27, 2026 9:13 AM IST
Indian equity markets are likely to remain under pressure in the near term, with HDFC Securities advising investors to stay cautious and avoid fresh long positions until the Nifty decisively closes above the 24,000 mark. The brokerage said derivatives positioning continues to favour bears, as aggressive call writing, fresh short build-up in index futures and increased bearish bets by foreign institutional investors (FIIs) point to further downside risks.
For the coming week, HDFC Securities expects 24,000-24,200 to remain the immediate resistance zone for the Nifty, while Bank Nifty needs to sustain above 58,000 before any meaningful recovery can be considered.
Market experts echoed a similar view, saying sentiment remains fragile ahead of the monthly expiry and the ongoing Q1FY27 earnings season.
"Market sentiment is turning increasingly cautious as Nifty approaches the crucial 23,800-23,600 support zone. Derivatives positioning continues to weaken as FIIs are still carrying elevated index shorts. Overall, leverage has not yet fully reset and meaningful short covering is yet to emerge," said Kruti Shah, Quant Analyst at Equirus Securities.
She added that although the Put-Call Ratio (PCR) has entered oversold territory, aggressive option writing coupled with elevated volatility could trigger sharp moves opposite to market expectations.
"With the Q1FY27 earnings season gathering pace, management commentary and earnings revisions are likely to become the key drivers of stock-specific performance, resulting in wider sectoral divergence," Shah said.
Nifty outlook According to HDFC Securities, the Nifty has broken below its five-week consolidation range after declining 2.33 per cent last week. The correction was accompanied by a 12 per cent increase in open interest in Nifty futures, signalling a significant build-up of fresh short positions.
The brokerage said aggressive call writing at 24,000-24,200 suggests a strong resistance zone, while the Nifty monthly Put-Call Ratio dropped sharply to 0.89 from 1.42, reflecting weakening market sentiment.
On the downside, HDFC Securities sees immediate support in the 23,600-23,500 zone, where substantial put writing has emerged. However, a decisive close below 23,500 could trigger additional short build-up or long unwinding, potentially dragging the index towards 23,100-23,000.
FII positioning turns more bearish HDFC Securities noted that FIIs increased bearish bets in the index futures segment during the week by net selling Rs 8,768 crore, while open interest rose by nearly 49,700 contracts, indicating fresh short positions in both Nifty and Bank Nifty futures.
In contrast, foreign investors covered short positions in stock futures, recording net buying of Rs 2,073 crore even as open interest declined by more than 71,700 contracts, suggesting selective optimism in individual stocks despite a cautious view on the broader indices.
Bank Nifty outlook HDFC Securities said Bank Nifty has also broken below its five-week trading range and underperformed the broader market, falling 3.12 per cent during the week. Open interest in Bank Nifty futures climbed 18.77 per cent, indicating aggressive fresh short creation.
The brokerage identified 57,000-57,500, followed by 58,000, as the key resistance levels due to heavy call writing. On the downside, significant put writing has emerged at 56,000-55,500, making this the immediate support zone.
However, a decisive close below 55,500 could intensify selling pressure and push the banking index towards the 54,500-54,800 range.
Defensive sectors remain in focus According to market experts, mid-cap IT stocks have witnessed a recovery driven by a combination of short covering and cash-market buying. Defensive sectors such as FMCG and low-volatility strategies continue to attract institutional flows, while weakness across the broader mid-cap universe suggests investors should remain selective.
Bottom line HDFC Securities maintains a cautious near-term stance on both benchmark indices, with derivatives data continuing to favour the bears. Until the Nifty reclaims 24,000 and Bank Nifty moves sustainably above 58,000, the brokerage believes investors should avoid aggressive long positions and focus instead on stock-specific opportunities emerging from the ongoing earnings season.
Indian equity markets are likely to remain under pressure in the near term, with HDFC Securities advising investors to stay cautious and avoid fresh long positions until the Nifty decisively closes above the 24,000 mark. The brokerage said derivatives positioning continues to favour bears, as aggressive call writing, fresh short build-up in index futures and increased bearish bets by foreign institutional investors (FIIs) point to further downside risks.
For the coming week, HDFC Securities expects 24,000-24,200 to remain the immediate resistance zone for the Nifty, while Bank Nifty needs to sustain above 58,000 before any meaningful recovery can be considered.
Market experts echoed a similar view, saying sentiment remains fragile ahead of the monthly expiry and the ongoing Q1FY27 earnings season.
"Market sentiment is turning increasingly cautious as Nifty approaches the crucial 23,800-23,600 support zone. Derivatives positioning continues to weaken as FIIs are still carrying elevated index shorts. Overall, leverage has not yet fully reset and meaningful short covering is yet to emerge," said Kruti Shah, Quant Analyst at Equirus Securities.
She added that although the Put-Call Ratio (PCR) has entered oversold territory, aggressive option writing coupled with elevated volatility could trigger sharp moves opposite to market expectations.
"With the Q1FY27 earnings season gathering pace, management commentary and earnings revisions are likely to become the key drivers of stock-specific performance, resulting in wider sectoral divergence," Shah said.
Nifty outlook According to HDFC Securities, the Nifty has broken below its five-week consolidation range after declining 2.33 per cent last week. The correction was accompanied by a 12 per cent increase in open interest in Nifty futures, signalling a significant build-up of fresh short positions.
The brokerage said aggressive call writing at 24,000-24,200 suggests a strong resistance zone, while the Nifty monthly Put-Call Ratio dropped sharply to 0.89 from 1.42, reflecting weakening market sentiment.
On the downside, HDFC Securities sees immediate support in the 23,600-23,500 zone, where substantial put writing has emerged. However, a decisive close below 23,500 could trigger additional short build-up or long unwinding, potentially dragging the index towards 23,100-23,000.
FII positioning turns more bearish HDFC Securities noted that FIIs increased bearish bets in the index futures segment during the week by net selling Rs 8,768 crore, while open interest rose by nearly 49,700 contracts, indicating fresh short positions in both Nifty and Bank Nifty futures.
In contrast, foreign investors covered short positions in stock futures, recording net buying of Rs 2,073 crore even as open interest declined by more than 71,700 contracts, suggesting selective optimism in individual stocks despite a cautious view on the broader indices.
Bank Nifty outlook HDFC Securities said Bank Nifty has also broken below its five-week trading range and underperformed the broader market, falling 3.12 per cent during the week. Open interest in Bank Nifty futures climbed 18.77 per cent, indicating aggressive fresh short creation.
The brokerage identified 57,000-57,500, followed by 58,000, as the key resistance levels due to heavy call writing. On the downside, significant put writing has emerged at 56,000-55,500, making this the immediate support zone.
However, a decisive close below 55,500 could intensify selling pressure and push the banking index towards the 54,500-54,800 range.
Defensive sectors remain in focus According to market experts, mid-cap IT stocks have witnessed a recovery driven by a combination of short covering and cash-market buying. Defensive sectors such as FMCG and low-volatility strategies continue to attract institutional flows, while weakness across the broader mid-cap universe suggests investors should remain selective.
Bottom line HDFC Securities maintains a cautious near-term stance on both benchmark indices, with derivatives data continuing to favour the bears. Until the Nifty reclaims 24,000 and Bank Nifty moves sustainably above 58,000, the brokerage believes investors should avoid aggressive long positions and focus instead on stock-specific opportunities emerging from the ongoing earnings season.