F&O expiry alert! Which way will the Nifty swing? Data, analysts say this

Will the market witness a bull-trap or a short-covering rally on Nifty futures & options expiry day; here are the key levels to watch out for as per market experts.

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The Nifty May futures & options (F&O) contracts are scheduled for the monthly expiry today, Thursday, May 29, 2025. In the run-up to the expiry day, the NSE Nifty 50 index has exhibited a fair amount of volatility as the index swung on either side of the 25,000-mark.  At present levels of 24,752, the Nifty has declined 1.5 per cent from its May month high of 25,116 hit on May 15; but still quotes with a gain of 2 per cent, thus far, in the May series. The NSE benchmark had hit a low of 23,848 in the current series. 

NSE F&O data shows this

  Data from the NSE F&O segment shows that foreign institutional investors (FIIs) net sold index futures - a combination of all 5 listed index futures Nifty, Bank Nifty, Nifty Midcap, FinNifty and NiftyNext worth ₹9,770 crore - in spite for a 8-day buying streak earlier in the May series.  Amid the recent volatility, and rollovers to the June series, FIIs open interest in index futures has increased by 24.6 per cent or 36,820 contracts in the last five trading sessions.  F&O data shows that FIIs have increased short bets in index futures in recent days, as the long-short ratio from 0.84 on May 15 - the day Nifty hit the series high - has dropped to 0.4 levels. This ratio implies that FIIs now hold nearly 5 short positions in index futures for every 2 buy-side holdings.  ALSO READ | These 5 pharma stocks can fall up to 12% as technical charts flag caution  Among the other participants, domestic institutional investors (DIIs) and retail investors are seen holding bullish bets, with ratio at 1.17 and 1.61, respectively. Proprietary traders, however, hold a slightly bearish bias with long-short ratio standing at 0.86. 

Nifty options data

  The Nifty Put-Call-Ratio for the May expiry stands at 0.66 shows the NSE data. Highest open interest in Nifty Call stands at 26,000 Strike Price; while highest open interest in Nifty Put is seen at 24,000 Strike.  Trading activity on Wednesday hints at a likely Call writing at 24,800 Strike, with sizeable build-up at 25,000 Call. On the other hand, notable open interest in Nifty Put is seen at 24,500 Strike, hinting at likely support. 

Here's what analysts expect on the Nifty expiry day

  Analysts fear that any bounce back from the present level, could turn out to be a bull trap and recommend adopting a 'sell-on-rise' trade for now.  ALSO READ |  5 stocks to bet on as Nifty Smallcap reaches 200-DMA; check full list here  On the futures contract front, FPIs are doubling down, aggressively ramping up their short exposure, showing no hint of stepping off the gas. Any minor bounce could end up as just another bull trap, triggering more selling waves and keeping the tone stuck in neutral-to-bearish gear, said Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities in a note.  Major support is parked at 24,700; a clean break under that could yank the floor out, sparking a sharper selloff. On the flip side, a sharp rally above 25,100 might force the bears to scramble for cover, possibly driving the index up to the psychological 25,300 zone and triggering some short-lived long plays, the note read.  Technically, the Nifty on Wednesday formed a red candle on the daily chart, indicating weakness. However, it continues to trade above its 21-Day Exponential Moving Average (21-DEMA), which is positioned near 24,570. As long as the Nifty holds above this level, the probability of a pullback move cannot be ruled out. On the upside, the index is likely to face strong resistance near the 25,000–25,100 zone, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates in a note.