FIIs were net buyers of equity on Mon. & Thu. (Aug 27 & 30), but net sellers on the other three days. Their total net selling was worth Rs 5.8 Billion. DIIs were net buyers of equity on Mon. Wed. & Fri. but net sellers on Tue. & Thu. Their total net buying was worth Rs 6.1 Billion, as per provisional figures.
India's GDP growth during Q1 (Apr-Jun) of FY 2018-19 was an impressive 8.2% - above expectations of most economists - albeit due to a lower base effect. However, the fiscal deficit during Apr-Jul '18 touched Rs 5.4 Trillion, which is 86.5% of the budgeted target for FY 2018-19.
Maruti sales in Aug '18 declined 3.6%. Hyundai (3.4%) and Ford (3.4%) showed moderate sales growth. Sales of M&M (14%), Toyota (17%) and Tata Motors (27%) showed strong double-digit growth.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex touched a new high of 38990 on Aug 29, but formed a 'reversal day' bar (higher high, lower close) that triggered a correction towards the lower edge of the upward-sloping channel within which the index has been trading for two months.
All three EMAs are rising, and the index is trading above them in a bull market. However, the widening space between the 20 day and 200 day EMAs is a sign of overbought conditions that can lead to a stronger correction.
Daily technical indicators are showing signs of correcting overbought conditions. MACD is poised to cross below its signal line and drop from its overbought zone. RSI has fallen from its overbought zone. Slow stochastic is about fall from its overbought zone. ROC is above its rising 10 day MA and trying to re-enter its overbought zone.
All four indicators are showing negative divergences by failing to move up with the index. The good GDP number may give a boost to bullish sentiments. It remains to be seen whether it will be sufficient to sustain the bull rally much further.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty touched a new high of 11760 and gained 120 points (1.1%) on a weekly closing basis. The index closed higher for the 6th straight week, and is trading well above its two weekly EMAs in a bull market.
Nifty has been trading within an upward-sloping channel for the past two months, and has been receiving good support from the lower edge of the channel.
Weekly technical indicators are inside their respective overbought zones. MACD and ROC are climbing higher with the index. RSI and Slow stochastic are showing negative divergences by moving sideways.
Nifty's TTM P/E touched a high of 28.72 on Mon. Aug 27 but has corrected to 28.40 - still well above its long-term average in overbought territory. The breadth indicator NSE TRIN (not shown) is trying to turn around after falling inside its overbought zone, and can limit index upside.
Bottomline? Bulls are in control of Sensex and Nifty charts. Overbought conditions and divergences on technical indicators are preventing the rallies from running away. Macro headwinds like high oil prices, a depreciating Rupee, widening trade and fiscal deficits, US-China tariff war, and F&O expiry kept bullish sentiments slightly subdued last week. Stay invested but maintain trailing stop-losses.
India's GDP growth during Q1 (Apr-Jun) of FY 2018-19 was an impressive 8.2% - above expectations of most economists - albeit due to a lower base effect. However, the fiscal deficit during Apr-Jul '18 touched Rs 5.4 Trillion, which is 86.5% of the budgeted target for FY 2018-19.
Maruti sales in Aug '18 declined 3.6%. Hyundai (3.4%) and Ford (3.4%) showed moderate sales growth. Sales of M&M (14%), Toyota (17%) and Tata Motors (27%) showed strong double-digit growth.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex touched a new high of 38990 on Aug 29, but formed a 'reversal day' bar (higher high, lower close) that triggered a correction towards the lower edge of the upward-sloping channel within which the index has been trading for two months.
All three EMAs are rising, and the index is trading above them in a bull market. However, the widening space between the 20 day and 200 day EMAs is a sign of overbought conditions that can lead to a stronger correction.
Daily technical indicators are showing signs of correcting overbought conditions. MACD is poised to cross below its signal line and drop from its overbought zone. RSI has fallen from its overbought zone. Slow stochastic is about fall from its overbought zone. ROC is above its rising 10 day MA and trying to re-enter its overbought zone.
All four indicators are showing negative divergences by failing to move up with the index. The good GDP number may give a boost to bullish sentiments. It remains to be seen whether it will be sufficient to sustain the bull rally much further.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty touched a new high of 11760 and gained 120 points (1.1%) on a weekly closing basis. The index closed higher for the 6th straight week, and is trading well above its two weekly EMAs in a bull market.
Nifty has been trading within an upward-sloping channel for the past two months, and has been receiving good support from the lower edge of the channel.
Weekly technical indicators are inside their respective overbought zones. MACD and ROC are climbing higher with the index. RSI and Slow stochastic are showing negative divergences by moving sideways.
Nifty's TTM P/E touched a high of 28.72 on Mon. Aug 27 but has corrected to 28.40 - still well above its long-term average in overbought territory. The breadth indicator NSE TRIN (not shown) is trying to turn around after falling inside its overbought zone, and can limit index upside.
Bottomline? Bulls are in control of Sensex and Nifty charts. Overbought conditions and divergences on technical indicators are preventing the rallies from running away. Macro headwinds like high oil prices, a depreciating Rupee, widening trade and fiscal deficits, US-China tariff war, and F&O expiry kept bullish sentiments slightly subdued last week. Stay invested but maintain trailing stop-losses.
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Stock Rally in India Faces Hurdles Despite World-Beating Growth
https://www.bloombergquint.com/markets/2018/09/03/stock-rally-in-india-faces-hurdles-despite-world-beating-growth
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