FIIs were net buyers of equity on Tue. (Aug 20), but were net sellers on the other days of the week. Their total net selling was worth Rs 33.4 Billion. DIIs were net buyers on all five trading days of the week. Their total net buying was worth Rs 43.0 Billion, as per provisional figures.
Finance Minister announced a 'package' that comprised a restatement of a few budget proposals; withdrawal of (a) controversial tax surcharge on some categories of FIIs and (b) 'punishment' for not meeting CSR obligations; postponement of (a) higher registration fees for cars, (b) phasing out of BS IV vehicles and (c) introduction of EVs; removal of ban on govt. vehicle purchase and increased depreciation on vehicles purchased till Mar 2020.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex broke out below a 'rising wedge' pattern on Wed. Aug 21. The possibility was mentioned in last week's post. The next day, the index dropped deeper inside the 'support zone' (between 35900 and 37100).
On Fri. Aug 23, the index breached the downward-sloping trend line of the 'broadening top' pattern intra-day, but bounced up to close higher - forming a 'reversal day' bar that often forms at an intermediate bottom.
Daily technical indicators are looking neutral to bearish. MACD is seeking support from its signal line in bearish zone. ROC and RSI are at their respective neutral zones. Slow stochastic is falling below its 50% level.
All four indicators are showing positive divergences (marked by blue arrows) by rising higher while the index dropped lower. That is a clear signal that precedes a technical bounce.
Escalation of the trade war between USA and China caused a sharp fall in US markets on Fri. Aug 23. Emerging markets, including India, may feel the after-effects next week. Bulls would do well to curb their enthusiasm.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty breached the downward-sloping trend line of a 'broadening top' pattern and the 10700 support level intra-week, but bounced up to close inside the 'support zone' (between 10700 and 11100).
The index closed below its 20 week and 50 week EMAs for the fourth straight week - for the first time since Oct '18 - and lost about 2% on a weekly closing basis.
Weekly technical indicators are looking bearish. MACD is falling below its signal line, and has entered its bearish zone. ROC is below its falling 10 week MA and is moving down inside oversold zone. RSI is falling towards its oversold zone. Slow stochastic is moving sideways at the edge of its oversold zone.
Note that RSI and Slow stochastic are showing positive divergences by not falling lower with the index. A technical bounce is likely.
Nifty's TTM P/E has moved down to 26.79 - which remains above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is falling sharply inside its oversold zone. Some near-term index upside is likely.
Bottomline? Sensex and Nifty charts are inside long-term support zones. A 'booster package' announced by Finance Minister may temporarily dispel the feeling of despondency in the market. A likely low Q1 (Jun '19) GDP figure and the ongoing US-China trade spat can dampen bullish hopes. Small investors may use any technical bounce to book profits.
Finance Minister announced a 'package' that comprised a restatement of a few budget proposals; withdrawal of (a) controversial tax surcharge on some categories of FIIs and (b) 'punishment' for not meeting CSR obligations; postponement of (a) higher registration fees for cars, (b) phasing out of BS IV vehicles and (c) introduction of EVs; removal of ban on govt. vehicle purchase and increased depreciation on vehicles purchased till Mar 2020.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex broke out below a 'rising wedge' pattern on Wed. Aug 21. The possibility was mentioned in last week's post. The next day, the index dropped deeper inside the 'support zone' (between 35900 and 37100).
On Fri. Aug 23, the index breached the downward-sloping trend line of the 'broadening top' pattern intra-day, but bounced up to close higher - forming a 'reversal day' bar that often forms at an intermediate bottom.
Daily technical indicators are looking neutral to bearish. MACD is seeking support from its signal line in bearish zone. ROC and RSI are at their respective neutral zones. Slow stochastic is falling below its 50% level.
All four indicators are showing positive divergences (marked by blue arrows) by rising higher while the index dropped lower. That is a clear signal that precedes a technical bounce.
Escalation of the trade war between USA and China caused a sharp fall in US markets on Fri. Aug 23. Emerging markets, including India, may feel the after-effects next week. Bulls would do well to curb their enthusiasm.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty breached the downward-sloping trend line of a 'broadening top' pattern and the 10700 support level intra-week, but bounced up to close inside the 'support zone' (between 10700 and 11100).
The index closed below its 20 week and 50 week EMAs for the fourth straight week - for the first time since Oct '18 - and lost about 2% on a weekly closing basis.
Weekly technical indicators are looking bearish. MACD is falling below its signal line, and has entered its bearish zone. ROC is below its falling 10 week MA and is moving down inside oversold zone. RSI is falling towards its oversold zone. Slow stochastic is moving sideways at the edge of its oversold zone.
Note that RSI and Slow stochastic are showing positive divergences by not falling lower with the index. A technical bounce is likely.
Nifty's TTM P/E has moved down to 26.79 - which remains above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is falling sharply inside its oversold zone. Some near-term index upside is likely.
Bottomline? Sensex and Nifty charts are inside long-term support zones. A 'booster package' announced by Finance Minister may temporarily dispel the feeling of despondency in the market. A likely low Q1 (Jun '19) GDP figure and the ongoing US-China trade spat can dampen bullish hopes. Small investors may use any technical bounce to book profits.
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