Nifty 50 Weekly Market Outlook – FII Shorts Deepen, Key Levels in Focus (28 July 2025)
📅 Published on: 28 July 2025
✍️ By: Indirect Tax India Online
📌 Highlights
Nifty 50 ends the week at 24,680.90, down 0.63%
FIIs intensify short positions in both Futures and Options
Critical support: 24,580 | Major resistance: 24,900–25,062
Divergence from global indices like NASDAQ, Dow Jones
Bearish undertone confirmed by technical indicators
📉 Nifty 50 – Snapshot & Sentiment Overview
This week, the Nifty 50 witnessed intensified selling pressure, closing below the 24,700 mark. Weakness in banking and financials, coupled with aggressive shorting by Foreign Institutional Investors (FIIs) in both index futures and options, has turned the sentiment firmly cautious.
Despite global equities showing strength, Indian markets continue to lag, largely due to domestic institutional selling, heavy derivative shorts, and technical weakness.
💼 Derivatives Market Pulse
🔄 F&O Positions – 28 July 2025
Segment Long Positions Short Positions Net
FII - Futures 33,986 198,714 -164,728 🔻
FII - Options Puts Long: 588,880 <br> Calls Long: 444,580 Calls Short: 522,244 <br> Puts Short: 346,635 Net: -319,909 🔻
DII Futures — — +22,674 📈
PRO Futures — — +15,217 📈
📌 Insight: FIIs are hedging aggressively, indicating a strong downside bias or heightened volatility expectations.
📊 Daily Variation in FII Derivatives Activity
Date Futures Variation Options Variation
28 Jul -10,390 🔻 -574,244 🔻
25 Jul -7,663 🔻 -528,052 🔻
24 Jul -7,263 🔻 -340,434 🔻
📉 The trend of relentless unwinding suggests a lack of bullish conviction among global participants.
🏦 Institutional Cash Flow – Equity Segment
Participant Gross Buy (₹ Cr) Gross Sell (₹ Cr) Net Flow
FII 13,660.48 15,079.92 -1,419.44 🔻
DII 10,238.00 (est.) 3,474.00 (est.) +6,764 📈
🔍 Interpretation: While domestic investors (DIIs) supported the market, it was not enough to absorb the sharp outflows from FIIs.
🌐 Global Markets Overview
Despite the Indian markets correcting, global cues remain broadly positive:
Index Close Week Change
NASDAQ 21,178.58 +2.8% 📈
Dow Jones 56,084.90 +1.2% 📈
S&P 500 6,045.26 +0.9% 📈
🧩 Key Divergence: India is seeing risk-off flows despite the global risk-on environment, indicating localised concern, possibly over valuations, earnings, or political cues.
🧠 Technical Analysis: Key Levels to Watch
Type Level Interpretation
Support 24,580 / 24,450 Breakdown can trigger sell-off to 24,200–24,000
Resistance 24,900 / 25,062 Only a breakout above this range negates bearish bias
RSI (14-day) 36.92 Approaching oversold territory
DMI +DI: 16.18, -DI: 17.02 Bearish crossover active
📉 The price is now trading below VWAP, 50 EMA and 200 EMA, all indicating a continuation of the downtrend unless a strong reversal emerges.
🧭 Scenarios Ahead: Bullish vs Bearish Outlook
✅ Bullish Case (Less Likely)
Needs FII short covering
Nifty to break above 25,062 with strong volume
Global cues remain positive and DIIs absorb supply
Upside Targets: 25,312 → 25,500 → 25,762
⚠️ Bearish Case (More Likely)
Sustained FII shorting
Breakdown below 24,580
Banking weakness to drag broader indices
Downside Targets: 24,450 → 24,200 → 23,950
🎯 Strategy for Traders & Investors
🔄 Short-term traders: Stick to sell-on-rise near resistance zones (24,767–24,900)
🛡️ Risk Management: Avoid leveraged positions; maintain strict SLs
📉 Options strategy: Consider 24,500 PE and 25,000 CE strangle due to volatility
🔎 Institutional Tracking: Watch for reversal signs in FII futures/net options, not price alone
🔚 Conclusion: Market at a Tipping Point
The current structure indicates that Nifty 50 is vulnerable to more downside, unless global cues trigger sharp reversals in FII positioning and cash flows. Watch 24,580 as the line in the sand for bulls. A breach could bring 24,200–24,000 in play.
Until FII sentiment reverses, adopt caution, protect profits, and focus on capital preservation.
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