Wednesday, November 29, 2017

Nifty chart: a midweek technical update (Nov 29 ‘17)

FIIs were net sellers of equity worth Rs 12.7 Billion during the first three days of trading this week. DIIs were net buyers of equity worth Rs 4.1 Billion, as per provisional figures.

Nifty lost only 29 points (0.3%), and continues to trade above its three rising EMAs in a bull market.

India's GST collection in Oct '17 fell to Rs 833 Billion from more than Rs 900 Billion in each of the previous three months due to some reduction in rates, refunds given to exporters and credit claimed by businesses.

The following concluding remarks were made in last week's technical update on the daily bar chart pattern of Nifty: "...a convincing move above the Nov 6 top of 10490 is required for bulls to regain complete control of the chart. Bears may try to prevent that from happening soon."

The index touched an intra-day high of 10410 on Tue. Nov 28, but formed a 'reversal day' bar (higher high, lower close) that stalled the previous 8 days' rally.

Daily technical indicators are in bullish zones but showing some signs of correcting. MACD and RSI are showing slight downward momentum. Slow stochastic has entered its overbought zone.

Nifty's TTM P/E is at 26.51 - much higher than its long-term average. The breadth indicator NSE TRIN (not shown) has fallen to the edge of its overbought zone and can limit index upside.

F&O settlement, forthcoming inflation and GDP numbers may have kept bullish enthusiasm in check. Expect some more consolidation or correction before the index makes an effort to cross above its Nov 6 top of 10490. 

No comments: