Foreign Institutional Investors demonstrated a shift in positioning last week, with their index future portfolio showing signs of potential reversal. According to reports from The Financial Express, the long short ratio reached extreme levels, prompting hopes for a market turnaround. However, the pace of ascent toward week's end raised concerns about bullish exhaustion, particularly following Friday's sharp decline in the final trading hour. Friday saw a 3.2% reduction in index future shorts to 2,52,333 contracts, while index future longs received a 2% boost to 35,826 contracts on the final trading day of the week.
Despite FII positioning improvements, broader market indicators suggest underlying weakness. As reported by The Financial Express, only 26% of the Small Cap 100 Index closed above their respective 10-day SMA, indicating significant selling pressure across smaller companies. Most sectoral indices reflected this negative sentiment, with Nifty Pharma, Metal and FMCG indices showing 80%, 67% and 60% respectively of constituents staying above the 10-day SMA. This divergence between FII positioning and broad market performance suggests selective buying rather than broad-based optimism.
The Nifty Financial Services Index is exhibiting pronounced technical weakening across multiple timeframes, according to analysis from The Financial Express. A clear breakdown below the Supertrend indicator, combined with RSI slipping beneath the 45 mark, reflects fading momentum and loss of bullish dominance. The index is consolidating around the 25,300–25,000 support zone, with a decisive breakdown below 25,000 potentially triggering accelerated decline toward 24,700 and 24,300 levels. On the upside, 26,000 continues to act as strong resistance, with any recovery encountering selling interest unless accompanied by meaningful momentum reversal.
The Nifty Auto Index is beginning to show encouraging signs of short-term bullish reversal, as reported by The Financial Express. The index has rebounded from its Supertrend support zone around 24,400, with multiple doji candlestick formations indicating demand absorption and potential price base formation. Weekly MACD is approaching a bullish crossover, which could mark a shift in medium-term momentum. As long as the index sustains above 24,400 support, the short-term bias remains constructive, with potential advance toward 26,700 and further upside extension toward 27,250 possible.
