Santosh Meena, Head of Research, Swastika Investmart: A critical aspect to monitor is the exchange rate between the rupee and the dollar. Recent indications of rupee weakness, with the potential to breach the 83 level against the dollar, necessitate close observation. Given the recent consistent selling by FIIs, their future actions will be closely tracked, as they hold the potential to dictate the overall trajectory of headline indices.
From a technical standpoint, the Nifty index is exhibiting signs of weakness, characterized by a lower top formation. The challenge lies in surpassing the 20-day moving average (20-DMA), positioned around the 19650 mark. On the downside, immediate support rests at 19300. A breach below this level could expose Nifty to further declines, possibly targeting the 19191 and 18888 levels. The re-establishment of bullish momentum hinges on a rebound above the 20-DMA.
Conversely, Bank Nifty is displaying underperformance and has experienced a breakdown below the crucial support level of 44444. This breach opens the door to a potential support zone ranging from 43500 to 43300. A bullish resurgence would necessitate a successful breach of the 50-day moving average (50-DMA) at 44700.
Furthermore, insights from the derivative market indicate a decline in FIIs' long exposure in index futures to 40%, signifying a short-term bearish bias. Additionally, the put-call ratio stands at 0.91, approaching oversold territory.
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