According to Sudeep Shah of SBI Securities, FIIs continue to adopt a cautious stance amid ongoing global uncertainty.
The FII long-short ratio stands at just 25.36%, indicating that 74.64% of their index futures positions remain on the short side. This suggests FIIs are still largely hedged or positioned for the downside, he said in an interview with Moneycontrol.
The Deputy Vice President and Head of Technical and Derivative Research at SBI Securities believes that until there is clarity on global trade tensions and bond yields stabilize, FIIs are likely to remain defensive, and their current positioning hints at continued caution going into next week.
Considering the current chart structure, he recommends adopting a cautious stance on the market and a stock-specific approach for the coming week.
Do you believe the momentum can be sustained in the coming week, taking the Nifty 50 decisively above 23,000?
The past week (ended April 11) turned out to be one of the most volatile in recent memory, with heightened turbulence sweeping across all major asset classes. This wave of volatility was triggered after US President Donald Trump announced a fresh round of tariffs, reigniting concerns over global trade tensions. In response, the US 10-year bond yield surged by over 10%, which was its steepest weekly gain since April 2022. Gold prices skyrocketed above the $3,200 per troy ounce mark for the first time, reflecting a flight to safety. Meanwhile, Brent crude slipped more than 4%, signaling demand worries, and the US Dollar Index dropped below the 99.50 level — a low not seen since April 2022. Equity markets were not spared either, as all major indices experienced sharp swings amid the unfolding macro uncertainty.
Our benchmark index, Nifty, was no exception, experiencing heightened volatility throughout the week. Each trading session opened with either a significant gap-up or a gap-down, reflecting the jittery sentiment prevailing in the market. The volatility index, India VIX, spiked over 45% during the week, underlining the surge in uncertainty and investor nervousness.
Interestingly, on Monday, after hitting a low of 21,743, the Nifty staged a sharp rebound of more than 1,000 points and ended the week by forming a Bullish Belt Hold-like candlestick pattern on the weekly chart. However, despite this sharp pullback, the index failed to close above its 20-day EMA. Momentum indicators and oscillators are currently suggesting a lack of clear directional bias, pointing toward a possible phase of consolidation.
Considering the current chart structure, we recommend adopting a cautious stance and stock-specific approach. Until the index confirms sustained strength above key moving averages, it would be prudent to avoid aggressive positions and focus on risk management. Regarding crucial levels, the zone of 22,600-22,550 will act as immediate support for the index, while, on the upside, the 50-day EMA zone of 23,000-23,050 will act as a crucial hurdle for the index. Any sustainable move above the level of 23,050 will lead to an extension of the pullback rally up to the level of 23,300, followed by the 23,500 level.
How are the FIIs positioning themselves for the next week, considering that tariff-led uncertainty is unlikely to end soon?
FIIs continue to adopt a cautious stance amid ongoing global uncertainty. In the cash segment, they have been net sellers to the tune of Rs 34,641.79 crore month-to-date, reflecting a clear risk-off sentiment. The recent surge in US 10-year bond yields are further discouraging flows into emerging markets like India.
In the derivatives market, the FII long-short ratio stands at just 25.36%, indicating that 74.64% of their index futures positions remain on the short side. This suggests they are still largely hedged or positioned for the downside.
Hence, we believe that until there is clarity on global trade tensions and bond yields stabilize, FIIs are likely to remain defensive, and their current positioning hints at continued caution going into next week.
Do you think the Bank Nifty looks much better than the Nifty 50 on the charts?
Bank Nifty is currently showing strong relative outperformance compared to the frontline indices. While Nifty breached its previous swing low of 21,965 last week, Bank Nifty held firm, marking a higher low at 49,156—well above its earlier swing low of 47,703. This signals underlying strength in the banking index.
On Monday, it took support at the 61.8% Fibonacci retracement level of its prior rally (47,703–52,064), and has since rebounded over 1,800 points. Importantly, the index continues to trade above both its short and long-term moving averages, reinforcing the bullish undertone.
The current chart structure suggests that Bank Nifty is well-positioned to outperform in the near term. Talking about crucial levels, the zone of 51,500-51,600 will act as an immediate hurdle for the index. Any sustainable move above the level of 51,600 will lead to a sharp upside rally up to the level of 52,500, followed by the 53,100 level in the near term. On the downside, the 20-day EMA zone of 50,500-50,400 is likely to provide a cushion in case of any immediate decline.
What are your top two picks for next week?
Power Grid Corporation of India
Power Grid has been strongly outperforming the frontline indices for the last couple of trading sessions. Also, it is trading above its short and long-term moving averages. The daily RSI (Relative Strength Index) is in bullish territory, and it is in rising mode. The daily MACD (Moving Average Convergence Divergence) stays in bullish territory as it is quoting above its zero line and signal line. The MACD histogram is suggesting a pickup in upside momentum.
The trend strength indicator, the Average Directional Index (ADX), is at 31.50, which indicates robust strength. The +DI is much above the -DI. This structure is indicative of the bullish strength in the stock. Hence, we recommend accumulating in the zone of Rs 305-300 level with a stop-loss of Rs 293 level. On the upside, it is likely to test the level of Rs 325 in the short term.
Poonawalla Fincorp surged above its recent swing high on Friday. Currently, it is trading above their crucial moving averages. The 20 and 50-day EMA is in rising mode, which is a bullish sign. Most noteworthy, the daily RSI is in a super bullish zone as per RSI range shift rules. Hence, we recommend accumulating in the zone of Rs 368-364 level with a stop-loss of Rs 355 level. On the upside, it is likely to test the level of Rs 390 in the short term.
Are you super bullish on PI Industries, given it is forming a robust bullish candle on the weekly charts, and Dixon Technologies, which is on the verge of a trendline breakout on the daily charts?
Yes, we are bullish on PI Industries as it has given a downward-sloping trendline breakout on a daily chart. This breakout is confirmed by robust volume. In addition, the stock has surged above its 100-day EMA level for the first time since November 2024. The momentum indicators also suggest strong bullish momentum. The daily RSI is in a bullish zone, and it is in a rising trajectory. Hence, we believe the stock is likely to continue its upward journey and test the level of Rs 4,000 in the short term. On the downside, the zone of Rs 3,480-3,470 is likely to provide a cushion in case of any immediate decline.
Dixon is on the verge of breaking out above a downward-sloping trendline on the daily chart. What’s noteworthy is the strong volume witnessed on Friday, even before the actual breakout occurred. This suggests early accumulation by smart investors, indicating growing confidence in the stock's potential upside. Going ahead, the zone of Rs 14,400-14,500 will act as a crucial hurdle for the stock as a downward sloping trendline and 100-day EMA is placed in that region. Any sustainable move above the level of Rs 14,500 will lead to a sharp upside rally in the stock.
Is it the right time to add exposure to PNB Housing Finance, and is CG Power & Industrial Solutions done with its correction?
It is the right time to add exposure to PNB Housing but not to CG Power. The stock of PNB Housing has been strongly outperforming the frontline indices since the last couple of trading sessions. It is marking the sequence of gradual higher tops and higher bottoms. Also, it is trading above its crucial moving averages. Most noteworthy, the daily RSI is in a super bullish zone as per RSI range shift rules. Hence, we believe the stock is likely to continue its upward journey in the next couple of trading sessions.
At the same time, the stock of CG Power is still in a downtrend as it is quoting below its short and long-term moving averages. Hence, we recommend avoiding it for now.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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