Anil Singhvi decodes markets, says expects short-covering soon, highlights 3 key reasons

Zee Business Managing Editor Anil Singhvi said that it happens rarely that FII’s net long and net short positions are almost equal. The only reason why FII’s are coming to India is to invest in stocks. They want to invest in stocks and let their wealth grow over a period of time. They don’t make money by shorting the Index, this is done to ensure that their loss is mitigated or protected to an extent.

The Market Guru said that FII’s are balanced on Net long and Net short positions at this stage. This indicates that they are over hedged or they are over cautious. It is possible that there could be a short-covering rally going forward.

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Key data pointers that Singhvi Highlights:

1)      Singhvi says that FII’s net positions in Index coming down to 50%, indicating that the selling is almost over in Markets. Singhvi said he is not expecting a sharp fall in markets from here on, after his analysis of the data.
 

FIIs लॉन्ग इंडेक्स में भारी गिरावट...

FIIs की इंडेक्स लॉन्ग और शॉर्ट पोजीशन के दिलचस्प आंकड़ें...

FIIs जल्द रोकेंगे बिकवाली...जानिए 3 बड़े कारण@AnilSinghvi_ - फिलहाल FIIs की इंडेक्स लॉन्ग और शॉर्ट लगभग बराबर... आज या गुरुवार को निचले स्तरों से शॉर्ट कवरिंग संभव#EditorsTake pic.twitter.com/VEkmz5L567

— Zee Business (@ZeeBusiness) April 13, 2021

2)      Singhvi said that selling shares and converting money into dollar terms would also impact FIIs. Since Rupee has depreciated to Rs 75 levels from Rs 72 levels in one week, it would take away nearly 4% of the profits of FIIs when they convert it into Dollars. Since the stock prices have also fallen 7% to 8%, FIIs would not sell as the market is not bad at this stage.  
 
3)      Singhvi said that the put call ratio is 0.88, which indicates markets are oversold at Current levels. Whether short-covering rally starts from today, in 2nd half or on expiry will be difficult to predict. However, Singhvi expects the short-covering rally to be strong and sharp from here on.

Singhvi said these are possibly the three reasons he thinks that FIIs will not sell further in the markets.