Wednesday, June 26, 2019

Nifty chart: a midweek technical update (Jun 26, 2019)

FIIs were net buyers of equity on all three trading days this week. Their total net buying was worth about Rs 14.7 Billion. DIIs were net sellers of equity on Wed., but were net buyers on Mon. and Tue. (Jun 24 and 25). Their total net buying was worth Rs 13.1 Billion, as per provisional figures.

In May '19, India's finished steel exports (319,000 Tonnes) fell 28% compared to May '18. It was at the lowest level since Apr '16. Exports to EU dropped 55%. Exports to Nepal, Sri Lanka, Malaysia were also substantially lower. The 25% import tariff has effectively closed the US market.

Currency notes in circulation stood at Rs 21.7 Trillion in end-May '19, showing an increase of more than 22% over the pre-demonetisation level of Rs 17.7 Trillion - according to a written reply in the Rajya Sabha by the Finance Minister. 


The following remark appeared in last week's technical update on the daily bar chart pattern of Nifty: "Slow stochastic has fallen inside its oversold zone, and can trigger an index pullback towards the 20 day EMA."

The index oscillated between its 20 day and 50 day EMAs during the past 4 trading sessions before moving up to close well above its 20 day EMA today. Is this the beginning of a pre-budget rally? If it is, it will provide a good opportunity to book some profits.

Daily technical indicators are looking neutral to bearish. MACD is moving sideways below its falling signal line in bullish zone. RSI is moving sideways along its 50% level. Slow stochastic has emerged from its oversold zone, and showing upward momentum.  

Nifty's TTM P/E has moved up to 29.09, inside overbought zone and much higher than its long-term average. The breadth indicator NSE TRIN (not shown) has fallen from its oversold zone. Some near-term upside is possible.

Another eminent economist - Deputy RBI Governor Dr Acharya - has recently put in his papers. He has followed in the footsteps of Dr Rajan, Dr Panagriya, Dr Patel and Dr Subramanian. 

Some of the best Indian minds - who hold teaching posts in top US universities - have been unable to compromise with the dictats of the present dispensation. It doesn't augur well for the future of India's economy.

A deficient monsoon is exacerbating agrarian distress. India's consumption story, which had boosted economic growth during the past couple of years, is shuddering to a halt. For the next two years, wealth protection should take priority over wealth building. 

1 comment:

Subhankar said...

India steel sector under pressure, domestic demand softens: CLSA

https://auto.economictimes.indiatimes.com/news/auto-components/india-steel-sector-under-pressure-domestic-demand-softens-clsa/69938889