Bearish signals dominate Nifty, CNX Realty, and Financials as technicals hint at caution. Review your positions now before the next move!
The FII long-short ratio in the Index Future segment has dipped to 9.9. This is due to a 14% rise in shorts on Friday that topped a whopping 43% rise on a week-on-week basis. This appears to be an extreme situation. Interestingly, a 6% rise in longs on Friday, albeit feeble, comes against the run of the play. This suggests that while shorts are moving to an extreme position, some FIIs have begun to take contra positions, pointing to the possibility of a reversal.
Nifty’s prospects
On the charts, Nifty is approaching 23000, a Fibonacci projection mark, which signals bearish exhaustion. This allows for bulls to regroup and stage a recovery move that should ideally aim for 23,600-23,900. Alternatively, inability to float above 23,000 could open the floodgates for the next leg of downsides, aiming for 22,000. However, its prospects appear less likely this week, despite the overwhelming bearish momentum. Meanwhile, the VIX rose just 5% on Friday, even though the Nifty fell sharply to the lowest this month. The VIX not crossing recent peaks is a sign that traders have not yet hit the panic button.
CNX Realty: Medium-Term Downtrend Remains Firmly in Place
The long-term price structure suggests that the cyclical upmove originating from the 2020 lows has already run its course. This advance culminated in a clear peak during the 2023–24 period, around the 1,300-1,400 zone, after which the index witnessed a well-defined trend reversal. Prices have since broken decisively below the rising cloud and key EMA bands, and are now trading comfortably beneath important Fibonacci retracement levels. Together, these signals confirm a meaningful transition into a medium-term downtrend.
On the medium-term timeframe, the index is currently consolidating near the 790 level, remaining below the 200-DMA as well as the earlier support band of 820-850, which has now decisively flipped into a resistance zone. Momentum indicators continue to reflect underlying weakness. The RSI has been consistently capped below the 40–45 range, highlighting sustained bearish momentum and the absence of any bullish or positive divergence. Similarly, the MACD remains deeply entrenched in negative territory, with expanding red histograms pointing to strengthening downside pressure rather than stabilisation.
From a price perspective, immediate support is located in the 740-720 zone. A convincing breakdown below this region could accelerate declines and open the door toward the 680–650 area over the coming weeks. On the upside, any recovery attempt or pullback rally is likely to attract selling interest near 850, while a stronger and more formidable resistance zone is placed in the 900–950 range.
Derivative positioning further validates the weak technical setup. Approximately 67% of stock futures recorded either a short build-up or a long unwinding on Friday, and this bearish positioning was echoed across nearly all stock futures on a weekly basis as well.
In summary, there are currently no credible signs of a trend reversal. Any rallies are likely to remain corrective in nature unless the index is able to reclaim and sustain levels above 900, accompanied by a clear and sustained improvement in momentum indicators.
CNX Financials: Near-term corrective phase showing increasing momentum
The long-term chart structure shows that the index has been trading within a broader rising channel since 2022, reflecting a sustained uptrend over the past few years. However, recent price action near the upper boundary of this channel points to a clear loss of upward momentum. After repeatedly forming lower highs in the 28,500-29,000 zone, the index has seen a sharp breakdown, slipping below the short-term rising trendline as well as the cloud and key EMA supports. This price behaviour signals a shift away from a strong trending phase toward a corrective or consolidation-led phase in the near term.
On the medium-term timeframe, the index is currently hovering around the 25,100 mark, trading decisively below the 200-DMA and the earlier support zone of 26,500–27,000. This region has now transitioned into a stiff resistance band, limiting the scope for any meaningful recovery. Momentum indicators continue to weaken: the RSI has slipped below the 40 level, highlighting deteriorating strength and the absence of any bullish or positive divergence. At the same time, the MACD has moved deeper into negative territory, with expanding red histograms confirming that bearish pressure is intensifying rather than stabilising.
Derivative positioning further reinforces the negative undertone. Nearly 90% of stock futures registered either short build-up or long unwinding on Friday, and this bearish bias has remained intact on a week-on-week basis, indicating sustained risk aversion and a limited appetite for long exposure.
From a price perspective, immediate support is located in the 24,700-24,500 zone, which also coincides with the 61.8% Fibonacci retracement of the prior up move. A sustained breakdown below this area could accelerate the corrective move and drag the index toward the 24,000-24,650 region. On the upside, any recovery attempt is likely to encounter selling pressure near 26,000, with a stronger resistance band placed slightly higher at 26,200–26,300.
First published in Financial Express.