Undoubtedly, bears have had the upper hand so far this month. Except for Pharma, all major Nifty sectoral indices are below their respective 20-day SMA. That said, more than 50% of the 13 major Nifty sectoral indices are above their 200-day SMA. So, is there a case of bulls regrouping in any of the pockets? Let us look at a few signals.
FIIs boost shorts
FII long-short ratio in the index future segment has dipped to 12.9, having declined steadily through the week. Friday saw FIIs cutting longs by nearly 10% to 30,320 contracts. This is the lowest level since February 2, to sub-20 levels, having dipped to 18.4 on Friday. This marks a 16% cut on a week-on-week basis. Simultaneously, shorts were boosted by 4.7% on Friday to 20,4611, the first time since Jan 28, above 2 lakh contracts.
On a week-on-week basis, short positions of FIIs rose by 60%. In absolute terms, the increase in shorts is significant, as the total holding now stands at 1,60,651 contracts, a 27% increase when compared to last Friday. In other words, shorts have increased much more than the decline in longs on a week-on-week basis, both in percentage and in absolute terms.
Financials: Short-term pressure persists below key levels
The Nifty Financial Services Index continues to exhibit noticeable short-term weakness, as the weekly timeframe clearly illustrates a breakdown from a previously rising channel after several weeks of hesitation and repeated failures near the upper boundary.
This definitive slip has accelerated downside pressure, dragging the index toward an earlier consolidation pocket that acted as a base during prior pauses. Momentum indicators on the weekly chart—specifically RSI and MACD—are now steadily trending lower, underscoring the ongoing loss of upward strength and the shift in control toward sellers.
On the daily timeframe, the index has moved decisively below a short-term support trendline, reinforcing the near-term bearish mood. Daily RSI remains pressed into the lower band, while MACD continues to widen negatively, both of which signal that bearish momentum remains firmly intact and that selling interest is still dominant. As prices move closer to a minor horizontal support zone near the recent swing lows, there is scope for a temporary halt in the decline or a brief counter-trend bounce.
Nevertheless, unless the index reclaims and sustains above the immediate resistance cluster around 27,200–27,500, the broader bias will continue to lean negative. In summary, the short-term technical configuration remains fragile, favouring either additional downside extension or a phase of range-bound consolidation before any credible recovery attempt can materialise.
Metals: Bullish Structure with Short-Term Consolidation
The weekly structure of the Nifty Metal Index maintains a clearly bullish tone, with price action continuing to respect the broader rising trend framework and consistently registering higher highs alongside higher lows. The underlying momentum backdrop on the weekly chart remains supportive: RSI is steadily positioned above the 50-level midpoint, and MACD stays in positive territory, even though it is beginning to display subtle flattening that hints at a maturing trend.
Shifting focus to the daily chart, the index appears to have entered a healthy consolidation phase following an extended multi-week upswing, with recent candles compressing into a narrow band around the 11,900–12,100 region. The cooling of RSI from overbought zones reflects a natural and constructive digestion of prior gains rather than the onset of a trend reversal. Meanwhile, MACD remains above zero, albeit gradually narrowing, suggesting a temporary deceleration in upward momentum rather than weakness in trend strength.
Immediate support is observed near the 11,800 level, an area where recent pullbacks have been effectively absorbed by buyers. Conversely, a sustained breakout above 12,150 could re-ignite the prevailing uptrend. On the whole, the short-term outlook continues to appear constructive, indicating a period of consolidation or mild pause before the next directional expansion in the broader bullish trajectory.
About author
The author is Anand James, Chief Market Strategist at Geojit Investments.
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