FIIs were net buyers of equity on Tue. Jul 31, but net sellers on the other four trading days last week. Their total net selling was worth Rs 4 Billion. DIIs were net buyers of equity on Mon. Jul 30 and Fri. Aug 3, but net sellers on the other three trading days. Their net selling was worth Rs 10.6 Billion, as per provisional figures.
Nikkei India's Manufacturing PMI slipped to 52.3 in Jul '18 from 53.1 In Jun '18. Still, it showed 12th consecutive month of expansion (>50). Nikkei India's Services PMI grew to 54.2 in Jul '18 from 52.6 in Jun '18 - showing strongest growth since Oct '16. The Composite (Manufacturing + Services) PMI rose to 54.1 in Jul '18 from 53.3 in Jun '18.
Auto sales were a mixed bag in Jul '18. Maruti (-0.6%), M&M (-6%), Ford (-7%) showed degrowth. Honda (28%), Tata Motors (14%) showed decent growth. In 2-wheelers, Hero Moto (9%), Royal Enfield (6%) had modest growth. TVS Motors (13%), Suzuki (57%) grew better. CV sales grew in strong double digits.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex touched a new high of 37712 on Aug 1, but formed a small 'reversal day' bar (higher high, lower close) that led to a bit of consolidation. All three EMAs are rising, and the index is trading above them in a bull market.
An interesting - and repeating - chart pattern may be forming:
The way dips are being bought by bulls, the possibility of a 3960 points correction seems remote at this stage. But such a possibility must have seemed remote in end-Jan '18 as well.
There is an old Latin saying: 'Praemonitus praemunitus' (which means 'forewarned is forearmed').
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty rose to touch a new intra-week high of 11391 and closed at 11361 with a weekly gain of 0.7%. The index is trading above its two weekly EMAs in a bull market, and looks poised to rise higher.
Note that the index had formed a 4 months long up-down-up pattern during end-Sep '17 to end-Jan '18. A similar up-down-up pattern is forming since end-Mar '18. In between was the 2 months long (1220 points) correction to the 50 week EMA during end-Jan '18 to end-Mar '18. This increases the probability of another corrective move towards the 50 day EMA - if the pattern repeats.
Weekly technical indicators are looking overbought. MACD is rising above its signal line in bullish zone. ROC is moving up inside its overbought zone. RSI and Slow stochastic are inside their respective overbought zones but showing negative divergences by not rising higher with the index.
Nifty's TTM P/E has moved up to 28.23, which is in overbought territory and well above its long-term average. The breadth indicator NSE TRIN (not shown) is moving up in neutral zone, and can limit near-term index upside.
Bottomline? Bulls appear to be in complete control of Sensex and Nifty charts. However, down trends in Midcap and Smallcap indices remain worrying signs. Some correction or consolidation seems likely. Any falls below previous (Jan '18) tops can lead to deeper corrections on both charts.
Nikkei India's Manufacturing PMI slipped to 52.3 in Jul '18 from 53.1 In Jun '18. Still, it showed 12th consecutive month of expansion (>50). Nikkei India's Services PMI grew to 54.2 in Jul '18 from 52.6 in Jun '18 - showing strongest growth since Oct '16. The Composite (Manufacturing + Services) PMI rose to 54.1 in Jul '18 from 53.3 in Jun '18.
Auto sales were a mixed bag in Jul '18. Maruti (-0.6%), M&M (-6%), Ford (-7%) showed degrowth. Honda (28%), Tata Motors (14%) showed decent growth. In 2-wheelers, Hero Moto (9%), Royal Enfield (6%) had modest growth. TVS Motors (13%), Suzuki (57%) grew better. CV sales grew in strong double digits.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex touched a new high of 37712 on Aug 1, but formed a small 'reversal day' bar (higher high, lower close) that led to a bit of consolidation. All three EMAs are rising, and the index is trading above them in a bull market.
An interesting - and repeating - chart pattern may be forming:
- From end-Sep '17 to early Nov '17, Sensex had a sharp rally that was followed by a sideways consolidation with a slight downward bias till mid-Dec '17. An upward breakout was immediately followed by a sideways consolidation within a small 'rectangle' till early-Jan '18. An upward breakout from the 'rectangle' led to a sharp rally that touched a new high in end-Jan '18 (marked by light blue oval).
- A two months long correction (of 3960 points) dropped the index briefly below its 200 day EMA.
- From end-Mar '18 to mid-May '18, Sensex had a sharp rally that was followed by a sideways consolidation with a slight downward bias till early-Jul '18. An upward breakout was followed by a sideways consolidation within a small 'rectangle' till 3rd week of Jul '18. An upward breakout from the 'rectangle' led to a rally that touched a new high on Aug 1 '18 (marked by light blue oval).
- If the pattern continues to repeat (there are no guarantees that it will), be prepared for a big corrective move that can drop the index to test support from its rising 200 day EMA once more.
The way dips are being bought by bulls, the possibility of a 3960 points correction seems remote at this stage. But such a possibility must have seemed remote in end-Jan '18 as well.
There is an old Latin saying: 'Praemonitus praemunitus' (which means 'forewarned is forearmed').
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty rose to touch a new intra-week high of 11391 and closed at 11361 with a weekly gain of 0.7%. The index is trading above its two weekly EMAs in a bull market, and looks poised to rise higher.
Note that the index had formed a 4 months long up-down-up pattern during end-Sep '17 to end-Jan '18. A similar up-down-up pattern is forming since end-Mar '18. In between was the 2 months long (1220 points) correction to the 50 week EMA during end-Jan '18 to end-Mar '18. This increases the probability of another corrective move towards the 50 day EMA - if the pattern repeats.
Weekly technical indicators are looking overbought. MACD is rising above its signal line in bullish zone. ROC is moving up inside its overbought zone. RSI and Slow stochastic are inside their respective overbought zones but showing negative divergences by not rising higher with the index.
Nifty's TTM P/E has moved up to 28.23, which is in overbought territory and well above its long-term average. The breadth indicator NSE TRIN (not shown) is moving up in neutral zone, and can limit near-term index upside.
Bottomline? Bulls appear to be in complete control of Sensex and Nifty charts. However, down trends in Midcap and Smallcap indices remain worrying signs. Some correction or consolidation seems likely. Any falls below previous (Jan '18) tops can lead to deeper corrections on both charts.
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