Finances Technical Outlook: Because the Union Finances 2025 approaches, volatility stays a key concern. In keeping with Motilal Oswal Monetary Companies (MOSL), the index has been forming decrease highs and decrease lows on month-to-month and weekly charts, witnessing a pointy correction of round 3,500 factors from 26,277 to 22,786 during the last 4 months.
MOSL famous that India VIX, a measure of market volatility, has surged from 13 to 19 ranges up to now 5 weeks, contributing to erratic swings with a adverse bias. This rise in volatility follows a powerful rally of 9,450 factors in Nifty from 16,828 in March 2023 to its peak at 26,277 in September 2024. The 38.2 per cent retracement of this whole rally stands at 22,666, which MOSL considers a essential help degree to carry amid market uncertainty.
International institutional buyers (FIIs) proceed to play an important function in market stability, stated the brokerage. MOSL highlighted that the FIIs’ Lengthy-Quick Ratio is at present round 20 per cent, which is on the decrease finish of the vary, indicating gentle positions by overseas market contributors. Nonetheless, constant promoting strain from FIIs within the money market stays a serious concern, including to the market’s instability.
For the primary time in 23 years, Nifty has recorded 4 consecutive months of decline. MOSL identified that the final occasion of such a protracted downturn was in 2001. Traditionally, after three straight months of losses, Nifty has rebounded in 70 per cent of circumstances over the following two to a few months, with common features of 3-5 per cent.
MOSL believes that Nifty has discovered fast help close to 22,800 ranges, however the medium-term pattern stays adverse, with each significant bounce dealing with promoting strain. Resistance ranges stay robust at greater zones. If the index manages to maintain above 22,660-22,800, a short-term restoration towards 23,333 and 23,750 is feasible.
Nonetheless, MOSL cautioned {that a} failure to surpass 23,333 and a breakdown under help ranges might result in one other draw back of 500-1,000 factors. Given the prevailing uncertainty and upcoming key occasions, MOSL suggests hedging positions utilizing a Bear Put Unfold technique to mitigate dangers in case of heightened volatility.
Disclaimer: The views and suggestions made above are these of particular person analysts or broking firms, and never of Mint. We advise buyers to verify with licensed consultants earlier than taking any funding selections.
