The Role of FII and DII Flow Metrics in Predicting Market Reversals
Praveen Dubey (SEBI Registered RA)
SP RESEARCHVIA PVT. LTD. (INH000015808)
Institutional Flows as Leading Indicators
Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) represent the smart money in Indian equities. Analyzing their daily net purchase and sales figures offers deep insights into institutional positioning. The market analysis desk at SP RESEARCHVIA PVT. LTD. decodes these capital flows.
How do FII and DII flows predict Nifty market trend reversals?
A divergence where DII buying increases while FII selling slows down, combined with institutional open interest changes in index futures, often signals a near-term market bottom and trend reversal.
Tracking Derivative Open Interest (OI)
Daily cash market flows must be cross-referenced with index futures index long-short ratios of FIIs. A low FII long-short ratio (below 20%) combined with tapering cash sales often points to short-covering rallies.
Written by Praveen Dubey
Chief Research Analyst | SEBI Reg: INH000015808
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