Edited fragments from a chat:
August series saw the Fii-Lange-Short ratio up to 8.24%. Given that Fii’s were unambiguously bearish, with sales on the money market, what is the prospects for the September series?
In March 2023, when the index fell below 30%for the future, the downward trend accelerated in the Nifty. A few days after the ratio reached 8.3%, the Nifty returned when Fiis started to cover their short positions. Especially during the extreme Bears phase from September 2024 to March 2025, the index future long ratio never fell to a few figures. The current phase, on the other hand, has seen 14 days of consecutive figures with one digit.
Yet it is difficult to predict how quickly a reversal will play. It is important to note that this extreme positioning comes from real worries – not just a statistical deviation that requires correction. The attitude of the FIIs reflects a clearly negative view of the Indian markets. A reversal will be possible soon, but it can take time before the bearish view plays out completely – or before the FIIs are incorrectly proven. At the moment we are in an extreme position, with FII index future long positions still almost 10%.
In addition to the solution of the tariff problem, the market also expects GST implementation after the council meeting of 3-4 September. Do you also see excitement on building consumer and car shares in the charts?
After a strong rally of two weeks, the Nifty Auto index showed signs of fatigue, with profitbooking in heavyweight shares by the end of the week. From a technical point of view, the index can fall in the direction of the 38.2% Fibonacci retracement level at 24,785. A closure below can lead to further disadvantage to 24,525-24,460 (50% fibo and 20dma), and possibly 24,270 -the GAP zone of 14-18 August. The MACD that approaches the signal line from above also points to the weakening momentum.
On the front of the derivatives, almost 77% of the shares have seen brief additions in strikes of almost OTM. In addition, 40% of the shares on Friday saw brief additions and 33% weekly, strengthening the Bearish sentiment. The most important ingredients such as M&M, Maruti, Tata Motors, Bajaj Auto and Eicher Motors have formed reversal patterns, suggesting that profit booking in the short term. With the index that in the last 10 years in historic profits in the win in the past 10 years, a recovery remains possible in the second half. Strength in Index Majors such as Titan, Dixon and Havells can further support. Derivate data show that 78% of the shares witnessed short additions in PE attacks in the almost OTM, which points to expectations of a reversal. These trends have advised a cautious approach in car shares, while sustainable consumers may offer better opportunities for a rebound in the coming week.
Historically, September has seen a mixed trend. But given the positive prospects around GST and the holidays that come in, where do you see the market to the coming month?
Since 2020, two of the four Septembers have ended positively for Nifty. Looking at the last 15 years, an interesting pattern comes to the fore. In seven years where the combined July -Auguste return was less than 2%, the next September became five times positive – with an average return of 5.15%. This year, Jul -Augustus has yielded a combined return of -4.37%, giving us a historical probability of 71% of a positive September.
July and August turned out to be bad for Nifty Bank. The bank meter fell another 2%in the week. How would you plan your transactions in the coming days?
The Bank Nifty Index closed the week with a large bearish Marubozu candle, which broke under the 38.2% Fibonacci retracement level of 53,871 (measured from the Mars low to the high of June), signaling weakening sentiment. Derided data show that more than 80% of the shares witnessed short build-up in almost ITM and OTM call attacks. In addition, 75% of the shares on Friday were short additions and almost 90% every week – the traders were positioned for further falls.
Technically, the 14-day RSI is approaching over-selling territory, and various index heavyweights have formed candles that look like Doji patterns, which indicates a possible attempt to stabilize. Shares such as HDFC Bank, Icici Bank, SBI, Axis Bank, Bank of Baroda and PNB can see a short bounce early next week.
Despite the 14-week RSI of Bank Nifty, which points to more disadvantage, the 14-day RSI has already entered the sold-up zone, which could cause a brief recovery. However, caution is justified later in the week, because the index can resume its decline to 52,684 (SMA of 20 weeks) and 52,614 (50% Fibonacci level).
Angel One shares were among the best losers of the week. Do you see the chances of recovery ahead?
Momentum is still with the bears, as indicated by directional moving indicators. However, six consecutive Down closes have pushed Oscillators to the Oversold site area, which means we are looking for pullback games. That said, power will only be confirmed if the stock above RS 2,286 closes.
Give us your top ideas for the coming week.
CG Power (CMP: RS 694)
View – Koop
Purpose – RS 728
Stop-Loss-RS 684
The share has traded a narrow, downward slope, but recently broke above the trend line resistance on RS 685 on the daily map, which indicates a potential shift in Momentum. The 14-day RSI is above 60 and has been transferred above its average to the bullish sentiment. We expect a movement to RS 728 in the short term. Long positions must be protected with a stop-loss just below RS 684.
Jai Corp (CMP: RS 120)
View – Koop
Target – RS 125 – RS 129
Stop-Loss-RS 116.5
The share saw profit books this week after a strong step last week and was a DOJI candle near the 61.8% Fibonacci racement level at RS 118, indicating that indecision. However, the 14-day RSI remains above 55, which suggests that the potential for further upside down. We expect a movement to RS 125 and eventually RS 129. Long positions must be protected with a stop-loss under RS 116.5.
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