Union Budget 2025 - 26 : Share Market investment Volatile move may continue
The Nifty index has been making lower top - lower bottom on monthly, weekly scale and recently corrected by around 3500 points from 26277 to 22786 zones in the last four months. India VIX has seen a surge from 13 to 19 levels in the last five weeks and rising volatility created swings with negative bias in the market. Nifty had seen a meaningful rally of 9450 points from 16828 (Mar'23) to 26277 (Sept'24) and 38.20% retracement of the entire move comes near 22666 zones which is a key support for the index to hold the recent market volatility.
FIIs Long Short Ratio is now at around 20% which is near the lower part of the range but selling from FIIs in the Cash market is the real cause of concern to get the market stability. Overall lower FIIs Index Long Short ratio indicates light position by Foreign market players.
The Nifty 50 index has recorded its fourth consecutive monthly decline, something that has not happened in the last 23 years. The last time Nifty fell for four straight months was in 2001. Since 2001, Nifty has fallen for three months in a row 13 times. In about 70% of these cases, it bounced back in the next 2-3 months with an average gain of 3-5%.
Nifty has taken immediate support near 22800 zones but medium term trend of the index is negative as any meaningful bounce is being sold and resistances are intact at higher zones.
Overall if Nifty manages to hold 22660-22800 zones then short term recovery is possible towards 23333 and 23750 zones but absence of follow up activities are still a concern in the market. If it fails to surpass 23333 zones and breaks an immediate support zone then it may open the downside of 500-1000 points in the index. Hence, its advised to do hedging strategy by creating a Bear Put Spread strategy ahead of a key event which could cause a volatile move in the market.
