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The Indian stock market, represented by benchmarks Nifty 50 and Sensex, is at a critical juncture. Having endured a six-week losing streak, the question looms large: Will Dalal Street extend its losses or manage to reverse the downward trend? The article provides a snapshot of the market sentiment as of August 11, 2025, highlighting key factors influencing the trajectory of the Indian equities. The opening is expected to be tepid, reflecting prevailing concerns about tariffs, lackluster earnings reports, and the persistent outflow of foreign institutional investors (FIIs). The GIFT Nifty index, acting as an early indicator, showed a marginal increase of 0.2 percent, or 50 points, at 24,440, suggesting a cautious start to the trading week. The previous session saw both Nifty and Sensex succumb to selling pressure, primarily driven by worries surrounding tariffs, a recurring theme that continues to weigh on investor confidence. The decline was broad-based, affecting various sectors, with autos, metals, IT, and pharmaceuticals experiencing notable losses. A significant development occurred on August 8, when Foreign Portfolio Investors (FPIs) emerged as net buyers, purchasing shares worth Rs 1,932 crore. This marks their highest single-session buy since June 26, signaling a potential shift in their investment strategy towards India. After three weeks of consistent selling, this reversal could indicate a pause in their risk aversion or even the beginning of a renewed interest in Indian equities. Simultaneously, domestic institutional investors (DIIs) played a supportive role by net buying Rs 7,723 crore of shares, according to provisional data from the National Stock Exchange (NSE). This dual buying activity from both FPIs and DIIs could provide some cushion against further declines. The article then delves into key technical levels that traders and investors should monitor during the session. A sustained move below Friday’s low could intensify selling pressure, potentially pushing the index towards the 24,200–24,150 support zone. This zone is particularly significant as it coincides with the 200-day Exponential Moving Average (DEMA) and an unfilled gap in the chart, reinforcing its importance as a potential support level. Furthermore, the index has already breached its 100-DEMA at 24,590, which now acts as a hurdle for any meaningful recovery. Dhupesh Dhameja of SAMCO Securities offered a bearish outlook, stating that unless the index decisively reclaims 24,600, any rebound is likely to be met with fresh short selling. The Relative Strength Index (RSI), a momentum indicator, has slipped below 40, breaking its previous lows, a sign of intensifying bearish momentum. Dhameja emphasized that the overall setup remains weak, and any pullbacks should be viewed as opportunities for short selling. He also pointed out that FPIs have increased their net short futures positions to over 92 percent, indicating a strong bearish conviction. Given the current technical and derivatives setup, a ‘sell-on-rise’ strategy is recommended, with the index expected to drift towards the 24,200–24,100 zone in the near term. The India VIX, a measure of market volatility, edged 2.95 percent higher to close at 12.03. Despite the presence of global headwinds, volatility remains relatively muted, suggesting that the broader market anticipates consolidation rather than a steep correction. This indicates that caution is prevailing among investors, but there are no signs of widespread panic. The relatively low VIX could also imply that investors are not expecting a significant downside risk in the immediate future. It is important to note the disclaimer provided in the article, which advises users to consult with certified experts before making any investment decisions, as the views and investment tips expressed by the experts are their own and not those of the website or its management. Overall, the article paints a cautious picture of the Indian stock market, highlighting the interplay between various factors such as tariff concerns, FPI activity, technical levels, and market volatility. The possibility of further downside pressure remains, but the recent buying activity from FPIs and DIIs provides a glimmer of hope for a potential reversal or at least a period of consolidation. Investors are advised to remain vigilant and closely monitor the key levels mentioned in the article before making any investment decisions.
A deeper dive into the technical analysis reveals the intricacies of the potential market movements. The 200-DEMA, often considered a long-term trend indicator, acts as a crucial support level. A breach below this level would confirm a bearish trend and potentially lead to further selling pressure. The unfilled gap in the chart also adds significance to the 24,200-24,150 zone. Gaps often act as magnets, attracting price towards them. If the price falls into this gap, it could trigger a further decline as traders try to fill the gap completely. The 100-DEMA, having been breached, now acts as resistance. Any attempt to move above this level would require significant buying pressure. The RSI, falling below 40, confirms the bearish momentum. An RSI below 30 is generally considered oversold, but in a strong downtrend, it can remain below 30 for an extended period. The fact that FPIs have increased their net short futures positions to over 92 percent is a strong indication of their bearish sentiment. Short futures positions benefit from a decline in the underlying asset. The high level of short positions suggests that FPIs are expecting further downside in the market. The 'sell-on-rise' strategy recommended by the analyst is a common approach in a downtrend. It involves selling the asset whenever there is a temporary price increase, capitalizing on the overall downward momentum. The anticipated drift towards the 24,200–24,100 zone is based on the technical analysis and the prevailing bearish sentiment. This zone is considered the next likely target for the market. The India VIX's rise, albeit modest, suggests increasing market uncertainty. Volatility typically rises when there is fear or uncertainty in the market. A higher VIX implies greater potential price swings. However, the relatively low level of the VIX suggests that the market is not expecting a major crash, but rather a period of consolidation. Consolidation usually occurs after a significant price move, as the market takes a breather and reassesses the situation. This can involve sideways price action as buyers and sellers are in equilibrium. The simultaneous buying by DIIs and FPIs on August 8 presents a mixed signal. While DII buying is generally seen as supportive of the market, the overall trend suggests DII buying is not enough to offset the FPI bearishness. It is important to assess whether this DII buying continues and increases to see if it can establish a long-term trend. The article also touches on external factors like tariff concerns. These external risks add to the overall uncertainty in the market and can amplify the impact of domestic issues. Trade conflicts and global economic headwinds can negatively impact investor sentiment and lead to further selling pressure. Therefore, investors must remain cognizant of both technical indicators and external macroeconomic factors.
In conclusion, the Indian stock market finds itself at a precarious point, wrestling with a confluence of bearish factors. The six-week losing streak serves as a stark reminder of the prevailing negative sentiment. The upcoming week appears set to open cautiously, reflecting persistent anxieties surrounding tariff uncertainties and a less-than-optimistic earnings landscape. However, a notable shift occurred with Foreign Portfolio Investors (FPIs) re-entering as net buyers, offering a glimmer of hope after a period of consistent selling. This influx of capital, combined with the supportive stance of Domestic Institutional Investors (DIIs), could potentially act as a buffer against further market declines. Despite this, the technical indicators point towards a bearish outlook. The breach of crucial moving averages and the growing short positions held by FPIs underscore the prevailing caution among market participants. A ‘sell-on-rise’ strategy appears to be the favored approach, with expectations of the index drifting further downwards in the near term. Market volatility, as indicated by the India VIX, remains relatively subdued, suggesting a consensus that the market is more likely to consolidate rather than experience a precipitous fall. This cautious optimism is tempered by the understanding that the market is navigating a complex web of global and domestic factors. While the recent buying activity from both FPIs and DIIs provides a degree of support, the underlying technical trends and persistent macro uncertainties suggest that a conservative approach is prudent. Investors are advised to carefully monitor key support and resistance levels, paying close attention to any significant shifts in FPI behavior. It is also crucial to consider external economic developments, such as trade-related news and global macroeconomic trends, which can have a significant impact on market sentiment. The disclaimer at the end of the article emphasizes the importance of consulting with qualified financial advisors before making any investment decisions. The views presented by market experts are their own opinions and should not be taken as definitive investment advice. Ultimately, the Indian stock market's trajectory in the coming week hinges on a delicate balance between bullish catalysts, such as the recent FPI buying activity, and bearish headwinds, including technical indicators and global uncertainties. A cautious and informed approach is essential for navigating this complex and volatile market landscape.
Source: Will Dalal Street snap six-week losing streak or extend losses? Key levels to watch on August 11