In a holiday-shortened trading week, FIIs were net buyers of equity on Fri. Oct 11, but net sellers on the other three days. Their total net selling was worth Rs 4.9 Billion. DIIs were net sellers of equity on Fri., but net buyers on the other three days of the week. Their total net buying was worth Rs 16.6 Billion, as per provisional figures.
India's Index of Industrial Production (IIP) contracted 1.1% in Aug '19 against a growth of 4.8% in Aug '18. This was the sharpest decline in industrial growth since Feb '13. During the Apr-Aug '19 period, IIP was 2.4% against 5.3% during Apr-Aug '18.
According to RBI's Monetary Policy Report, forward-looking indicators suggest that world trade is likely to slow down further in 2019. The Indian economy, which is already facing a slow down, may face the heat even more.
BSE Sensex index chart pattern
After closing below its three EMAs in bear territory on Mon. Oct 7, the daily bar chart pattern of Sensex got re-energised during the Dussehra holiday on Oct 8, and bounced up to close above its three EMAs in bull territory.
The 300 points upward 'gap' that formed on on Mon. Sep 23 was subsequently filled on Oct 1. Since then, the 'gap' has been acting as a resistance zone. If the index manages to overcome the 'gap' resistance, it is likely to face stronger resistance from the down trend line.
Daily technical indicators are turning bullish. MACD is moving sideways below its signal line in bullish zone. ROC has bounced up from the edge of its oversold zone. RSI and Slow stochastic have bounced up from their respective 50% levels. Some near-term upside is possible, but don't expect a strong rally.
Early Q2 (Sep '19) results from TCS, Infosys, IndusInd Bank were more or less in line with market expectations, but showed weak top and bottom line growth. Auto sales plummeted in double-digits during Sep '19 - so they will declare poor results or even losses.
Several economic measures announced by the government - the latest being a DA boost for govt. employees - is yet to show up on company earnings. In a desperate effort at window dressing, first day collections of movie theatres and on-line sales of amazon and flipkart are being touted as India's economic well being!
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty received good support from the zone between 10700 and 11100, and bounced up to close above its 20 week and 50 week EMAs in long-term bull territory.
The (blue) down trend line has dominated the index chart since the beginning of Jun '19, and may continue to do so for a while longer. India's economy is on a downward trajectory, and so far there are no signs of an imminent recovery - despite valiant efforts by government spin doctors.
Weekly technical indicators are giving mixed signals. MACD is moving sideways below its signal line in neutral zone. ROC has entered its bullish zone. RSI is moving sideways below its 50% level. Slow stochastic is trying to move up above its 50% level. Some near-term index upside is likely.
Nifty's TTM P/E has moved up to 26.11 - which is well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is hovering at the edge of its oversold zone, giving no clear directional indication.
Bottomline? Sensex and Nifty charts are consolidating after sharp upward breakouts. A cut in corporate taxes had boosted bullish sentiment, but did not have much effect on consumer demand. Both indices need to overcome trend line resistances to move higher. Some more consolidation or correction may be on the cards.
India's Index of Industrial Production (IIP) contracted 1.1% in Aug '19 against a growth of 4.8% in Aug '18. This was the sharpest decline in industrial growth since Feb '13. During the Apr-Aug '19 period, IIP was 2.4% against 5.3% during Apr-Aug '18.
According to RBI's Monetary Policy Report, forward-looking indicators suggest that world trade is likely to slow down further in 2019. The Indian economy, which is already facing a slow down, may face the heat even more.
BSE Sensex index chart pattern
After closing below its three EMAs in bear territory on Mon. Oct 7, the daily bar chart pattern of Sensex got re-energised during the Dussehra holiday on Oct 8, and bounced up to close above its three EMAs in bull territory.
The 300 points upward 'gap' that formed on on Mon. Sep 23 was subsequently filled on Oct 1. Since then, the 'gap' has been acting as a resistance zone. If the index manages to overcome the 'gap' resistance, it is likely to face stronger resistance from the down trend line.
Daily technical indicators are turning bullish. MACD is moving sideways below its signal line in bullish zone. ROC has bounced up from the edge of its oversold zone. RSI and Slow stochastic have bounced up from their respective 50% levels. Some near-term upside is possible, but don't expect a strong rally.
Early Q2 (Sep '19) results from TCS, Infosys, IndusInd Bank were more or less in line with market expectations, but showed weak top and bottom line growth. Auto sales plummeted in double-digits during Sep '19 - so they will declare poor results or even losses.
Several economic measures announced by the government - the latest being a DA boost for govt. employees - is yet to show up on company earnings. In a desperate effort at window dressing, first day collections of movie theatres and on-line sales of amazon and flipkart are being touted as India's economic well being!
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty received good support from the zone between 10700 and 11100, and bounced up to close above its 20 week and 50 week EMAs in long-term bull territory.
The (blue) down trend line has dominated the index chart since the beginning of Jun '19, and may continue to do so for a while longer. India's economy is on a downward trajectory, and so far there are no signs of an imminent recovery - despite valiant efforts by government spin doctors.
Weekly technical indicators are giving mixed signals. MACD is moving sideways below its signal line in neutral zone. ROC has entered its bullish zone. RSI is moving sideways below its 50% level. Slow stochastic is trying to move up above its 50% level. Some near-term index upside is likely.
Nifty's TTM P/E has moved up to 26.11 - which is well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is hovering at the edge of its oversold zone, giving no clear directional indication.
Bottomline? Sensex and Nifty charts are consolidating after sharp upward breakouts. A cut in corporate taxes had boosted bullish sentiment, but did not have much effect on consumer demand. Both indices need to overcome trend line resistances to move higher. Some more consolidation or correction may be on the cards.
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