FIIs were net sellers of equity worth Rs 47.4 Billion during the week, though they were net buyers on Thu. Jun 21. DIIs were net buyers of equity worth Rs 47.2 Billion, as per provisional figures. Sensex and Nifty gained marginally on a weekly closing basis.
Out of 21 PSU banks, only 2 - Indian Bank and Vijaya Bank - were able to pay dividends worth Rs 4.44 Billion to the government. This was the worst dividend payout by PSU banks in the past 10 years.
The government is considering a proposal to sell a significant proportion of its stake in IDBI Bank to LIC, and has approached IRDAI for clearance (as LIC already holds more than 10% stake in IDBI and can't hold more than 15% in a single company).
BSE Sensex index chart pattern
The following comments were made in last week's post on the daily bar chart pattern of Sensex: "The 20 day EMA is merging with the lower edge of the 'rising wedge'. That ought to help bulls put up a fight to prevent a likely fall below the 'wedge'."
The index did fall below the 'rising wedge' on Tue. Jun 19 but received support from its 20 day EMA. For the rest of the week, the index continued to receive support from the 20 day EMA but faced resistance from the lower edge of the 'wedge'.
The down trend line is also providing resistance to the index - as it has done for almost 5 months. Sensex closed above its three rising EMAs in bull territory, but needs to move convincingly above the down trend line to attain new highs.
Daily technical indicators are in bullish zones, but not showing much upward momentum. MACD is entangled with its signal line and moving sideways. ROC bounced up from its '0' line but remains below its 10 day MA. RSI and Slow stochastic are rising towards their respective overbought zones.
Despite OPEC's decision to increase output on Fri. Jun 22, oil prices shot up as the announced increase was less than expectations. Progress of the monsoon across India has been slow. These are worrying signs that inflation may continue to rise.
Bull markets are supposed to take all worries in stride. However, caution is advised. As long as bears are able to defend the down trend line, the possibility of a fall towards (and even below) the 132 points 'gap' can't be ruled out.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty dropped to seek support from the 33 points downward 'gap', but bounced up to close with a weekly gain for the 5th week in a row.
The down trend line again provided strong resistance. Nifty's weekly bar formed a bearish 'hanging man' candlestick pattern. Volume bars are showing negative divergence by touching lower tops.
Weekly technical indicators are in bullish zones. MACD has started to rise above its signal line. RSI is facing resistance from the edge of its overbought zone. Slow stochastic has entered its overbought zone.
However, ROC is about to cross below its rising 10 week MA, and has slipped down from its overbought zone. Some correction or consolidation is likely.
Nifty's TTM P/E has slipped down to 26.63 - still well above its long-term average. The breadth indicator NSE TRIN (not shown) is oscillating in neutral zone, hinting at some consolidation around current levels.
Bottomline? Bears strongly defended down trend lines on Sensex and Nifty charts. Bulls are pushing them to the limit of their resistance. Some more consolidation or correction can be expected in F&O expiry week. Stay on the sidelines till clear trends emerge. Long term trends remain up.
Out of 21 PSU banks, only 2 - Indian Bank and Vijaya Bank - were able to pay dividends worth Rs 4.44 Billion to the government. This was the worst dividend payout by PSU banks in the past 10 years.
The government is considering a proposal to sell a significant proportion of its stake in IDBI Bank to LIC, and has approached IRDAI for clearance (as LIC already holds more than 10% stake in IDBI and can't hold more than 15% in a single company).
BSE Sensex index chart pattern
The following comments were made in last week's post on the daily bar chart pattern of Sensex: "The 20 day EMA is merging with the lower edge of the 'rising wedge'. That ought to help bulls put up a fight to prevent a likely fall below the 'wedge'."
The index did fall below the 'rising wedge' on Tue. Jun 19 but received support from its 20 day EMA. For the rest of the week, the index continued to receive support from the 20 day EMA but faced resistance from the lower edge of the 'wedge'.
The down trend line is also providing resistance to the index - as it has done for almost 5 months. Sensex closed above its three rising EMAs in bull territory, but needs to move convincingly above the down trend line to attain new highs.
Daily technical indicators are in bullish zones, but not showing much upward momentum. MACD is entangled with its signal line and moving sideways. ROC bounced up from its '0' line but remains below its 10 day MA. RSI and Slow stochastic are rising towards their respective overbought zones.
Despite OPEC's decision to increase output on Fri. Jun 22, oil prices shot up as the announced increase was less than expectations. Progress of the monsoon across India has been slow. These are worrying signs that inflation may continue to rise.
Bull markets are supposed to take all worries in stride. However, caution is advised. As long as bears are able to defend the down trend line, the possibility of a fall towards (and even below) the 132 points 'gap' can't be ruled out.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty dropped to seek support from the 33 points downward 'gap', but bounced up to close with a weekly gain for the 5th week in a row.
The down trend line again provided strong resistance. Nifty's weekly bar formed a bearish 'hanging man' candlestick pattern. Volume bars are showing negative divergence by touching lower tops.
Weekly technical indicators are in bullish zones. MACD has started to rise above its signal line. RSI is facing resistance from the edge of its overbought zone. Slow stochastic has entered its overbought zone.
However, ROC is about to cross below its rising 10 week MA, and has slipped down from its overbought zone. Some correction or consolidation is likely.
Nifty's TTM P/E has slipped down to 26.63 - still well above its long-term average. The breadth indicator NSE TRIN (not shown) is oscillating in neutral zone, hinting at some consolidation around current levels.
Bottomline? Bears strongly defended down trend lines on Sensex and Nifty charts. Bulls are pushing them to the limit of their resistance. Some more consolidation or correction can be expected in F&O expiry week. Stay on the sidelines till clear trends emerge. Long term trends remain up.
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