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Nifty - FIIs resilient selling impacting Pre-Budget Rally

As we know the coming week is a truncating week, because we have a public holiday on 26th Jan-2023, which will impact weekly as well as monthly expiry to be concluded on 25th Jan-2023.

There is no significant change in the overall technical setup that was seen at the

beginning of the previous week.

It is important to note that it is now the 5th week in a row that the NIFTY has taken support on the 20-Week moving average, which now stands at 17907. This is also to be noted that this level also lies in close proximity to the 100-Day Moving Average which is placed at 17937.

We can say that the range of the 17900-17940 on the Nifty-50 Index for the coming week is now a very important zone, because below this level, strong support will break and we can slip with our bout of selling spree.


Nifty -50 Index Monthly Chart

The Nifty -50 Monthly Index is still holding 18000, but with a bearish bias. somehow, some good corporate results helped it to stay above the level. but between the lines, the Fund Managers from all Domestic Institutions once again become successful to keep the index above 18000 to save themselves from facing redemption pressure.

Nifty -50 Index Weekly Chart

The Nifty -50 weekly Index is closing as a Doji candle, the only difference is that the previous week it was a green candle, and this week it is a red candle, and closed happened above a little on the higher side.

This shows the confused state of mind of buyers and sellers. The buyer does not want to take more risk, but even the sellers do not want to sell their stock deliveries, in the anticipation of coming budget announcements, which are due on 1st February 2023.

Nifty -50 Index Daily Chart

The Nifty -50 Daily Index clearly shows that the upside is really very limited. The resilient selling of FIIs shows that they are always waiting for the upside to sell on the rise and the same they are doing for many previous days.

The Previous Week Data from FIIs and DIIs

FIIs have net sold shares worth Rs 2,461 crore for the passing week, taking the total monthly outflow to nearly Rs 20,000 crore for January, which is bigger than the outflow we have seen in the previous month.

On the contrary, domestic institutional investors have created strong support for the Indian markets as they have bought nearly Rs 3,400 crore worth of shares during the week and their buying in the current month is more than Rs 16,000 crore.

Outlook for the coming Week starting from 23rd Jan-2023:

The Nifty -50 daily Index made a bearish candle with lower high and lower low levels, which is not a good sign for the coming weeks.

Volatility dropped INDIAVIX came off by 4.65% to 13.75 on a weekly basis.

The Support for the Coming Week:

We can see that the support comes in at 17900 and if it breaks down then, it can touch up to the 17760 level. But below that, again we can see the fear that the downside will be opened to the levels of 17400 and 17200 in the coming weeks.

The Resistance for the Coming Week:

The coming week's resistance will be facing at 18300 and if it breaks upwards then, it can touch upside up to 18480 levels. but still, we can not see that the 18500 level will be in our range in short term.

As the markets head towards the Union Budget which is one of the most important external domestic events, it is likely to consolidate with a positive bias.

Public sector enterprises can do well, keeping Union Budget in mind. so the stock-specific actions can not be ruled out.

It is strongly recommended that the overall exposures should be kept at modest levels until a distinct directional bias is established. While staying light on positions, a cautiously positive outlook is advised for the coming week.

Disclaimer: I am not a SEBI Registered technical, so just remember, to consult your financial advisor, before taking any trade. This technical post is only for learning purposes.

Thanks for reading.

Keep Trading

Stay Invested


Neeraj Bhatia

(Managing Director)

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