Why Is Nifty Showing Bullish Undertone as Put Writing Dominates?
About the Current Setup
Option Chain Analysis for 18 February 2026 highlights a notable open interest build-up at the 26,000 Call and 25,500 Put strikes. Importantly, higher Put writing compared to Call writing has been observed, suggesting a bullish undertone in the market.
The Put-Call Ratio (PCR) stands at 1.14, indicating stronger participation on the Put side. Max Pain is placed at 25,750, while VWAP-based projections suggest a trading band between 25,640 and 25,915 for the next session.
Key Option Data Snapshot
🔹 Significant Call OI: 26,000
🔹 Significant Put OI: 25,500
🔹 PCR: 1.14
🔹 Max Pain: 25,750
🔹 VWAP Range: 25,640 – 25,915
Sentiment: Higher Put writing vs Call writing → Bullish bias
The clustering at 26,000 Call continues to act as a near-term resistance zone, while aggressive Put writing at 25,500 suggests traders are building support expectations below current levels.
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Market Recap – 18 February
Nifty opened positive but witnessed intraday profit booking that dragged the index toward 25,650. However, buying interest at lower levels provided support, allowing the index to recover and close higher by 0.37%.
This price action reflects dip-buying behaviour rather than distribution at higher levels.
Sectoral Rotation
🔹 Top Performers: PSU Banks, Metals
🔹 Lagging Sectors: IT, Chemicals
The leadership from PSU Banks aligns with improving derivative positioning in financial indices.
Sector rotation often precedes directional breakouts. When financials and metals lead while defensives lag, the market structure tends to lean constructive.
Institutional Flow Analysis
🔹 FIIs: Net buyers of ₹1,154.34 crore
🔹 DIIs: Net buyers of ₹440.34 crore
Dual participation from both FIIs and DIIs reinforces the strength of intraday recovery.
Positive cash market flows combined with higher Put writing typically indicate confidence in downside support zones.
| FII Index Futures | Net Contracts |
|---|---|
| Nifty | 2,605 |
| Bank Nifty | 5,151 |
| Fin Nifty | 4 |
| Midcap Nifty | -1,116 |
| Nifty Next 50 | 20 |
Interpretation of the Data
Higher Put writing at 25,500 combined with a PCR above 1 indicates traders are confident that the index may sustain above immediate support.
However, the heavy Call OI at 26,000 suggests upside may face supply near that zone unless fresh breakout volumes emerge.
Max Pain at 25,750 indicates expiry gravitates toward this level unless strong directional momentum overrides the positioning.
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What to Watch Next
• Sustain above 25,640 to maintain bullish bias
• Break above 25,915 may trigger short covering
• Failure below 25,640 may bring back consolidation
• Watch 26,000 strike for aggressive Call unwinding or fresh writing
Derivative Pro & Nifty Expert Gulshan Khera, CFP® believes option structure currently favors controlled upside unless global cues disrupt the flow. Traders should focus on risk-managed strategies rather than directional overcommitment.
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Related Queries on Nifty and Derivatives
What does PCR of 1.14 indicate for Nifty?
How important is the 26,000 Call strike?
What is the significance of Max Pain at 25,750?
How does higher Put writing signal bullish bias?
What trading strategy works in neutral-to-bullish markets?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
