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Nifty Recovers, Realty Surges Amidst FII Caution
13 Jul
Summary
- Nifty shows caution but 61% of Nifty 500 stocks above 10-day SMA
- FII bearish exposure remains high despite increased long positions
- Nifty Realty Index breaks consolidation; Nifty PSE shows bottoming signs
The Nifty index experienced a mid-week decline, followed by a recovery on Friday. However, its inability to surpass recent peaks introduces a degree of caution for the upcoming week. Encouragingly, 61% of Nifty 500 stocks have closed above their 10-day Simple Moving Average (SMA), the highest level from the prior week, suggesting robust risk appetite.
Foreign Institutional Investors (FIIs) increased their long positions in index futures by 9% on Friday, contributing to a 15% week-on-week rise. Despite this, their bearish exposure remains relatively high, with short positions still approximately 3% higher than the previous week. The FII long-short ratio currently stands at 10.6, below both its 30-day and 90-day means.
The Nifty Realty Index has achieved a significant breakout from prolonged consolidation, reinforcing its broader uptrend. Strong momentum indicators and supportive derivatives activity, including short covering in nearly 60% of realty stocks, suggest continued outperformance. The index is positioned for advances towards 960 and 1,000.
Meanwhile, the Nifty PSE Index displays early signs of bottom formation after a corrective phase. While momentum indicators are easing, the index is attempting to stabilize above crucial support at 9,750-9,800. A decisive move above 10,100-10,200 could signal a bullish reversal, potentially targeting 10,700.
