For the month of Oct '19, FIIs were net buyers of equity after five straight months of net selling. Their total net buying was worth Rs 85.9 Billion. DIIs were net buyers of equity for the sixth month in a row. Their total net buying was worth Rs 47.6 Billion.
Confluence of major festivals and big discounts failed to bring much cheer to auto makers during Oct '19. Maruti and Volkswagen showed marginal sales growth over Oct '18. Renault showed good gains. Hyundai and Toyota showed single-digit de-growth. The rest - cars, 2-wheelers, CVs - showed double-digit de-growth.
IHS Markit India's Manufacturing PMI slipped to a 2-year low of 50.6 in Oct '19 from 51.4 in Sep '19. (A number above 50 indicates expansion.) GST collection in Oct '19 was Rs 954 Billion, which was 3.8% higher than Sep '19 figure of Rs 919 Billion but 5.3% lower than Rs 1.01 Trillion collected in Oct '18.
As per CMIE, India's unemployment rate in Oct '19 climbed to 8.5% - the highest since Aug '16 - from 7.2% in Sep '19. A thriving economy has been brought to its knees by a poorly planned demonetisation and a hastily implemented GST.
BSE Sensex index chart pattern
Bulls came charging out of the gate after the Diwali break. The daily bar chart pattern of Sensex broke out convincingly above the (blue) down trend line on Tue. Oct 29, and rose to touch a new intra-day high of 40392 on Oct 31.
Bulls failed to press home their advantage despite strong equity buying by FIIs. By the end of the week, the index formed a small bearish 'rounding top' pattern that can trigger a correction.
Daily technical indicators are in overbought zones. MACD and RSI are showing upward momentum. ROC and Slow stochastic are showing slight downward momentum. ROC touched a lower top when the index touched a new high. Some near-term index consolidation or a pullback towards the down trend line is likely.
All three EMAs are rising, and the index is trading above them in a bull market. However, the index failed to close above its Jun 3 '19 life-time closing high of 40268 despite touching a new intra-day high of 40392. Bears may use the opportunity to launch an attack.
Profit booking can be expected when an index approaches a previous high. Investors remember what happened after the previous high was touched. Cautious optimism should be the key words here - not aggressive bullishness.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty closed convincingly above the (blue) down trend line on the back of strong FII buying. FIIs and DIIs had turned net sellers of equity a week ago, causing the index to pullback to the down trend line. Such pullbacks often provide buying opportunities.
However, the index is trading close to a lifetime high. It is a good idea to become fearful when everyone else is turning greedy. The weak macroeconomic indicators are suggesting that the market is running ahead of itself.
Weekly technical indicators are looking bullish and overbought. MACD and RSI are rising in their respective bullish zones. ROC and Slow stochastic are well inside their respective overbought zones. Some index consolidation or correction may be around the corner.
Nifty's TTM P/E has moved up to 27.47 - which is well above its long-term average inside overbought zone. The breadth indicator NSE TRIN (not shown) is treading water in neutral zone. Near-term index consolidation is a possibility.
Bottomline? Sensex and Nifty charts appear to have reversed 5 months long down trends. A cut in corporate taxes leading to better Q2 earnings has boosted bullish sentiments. Topline growth is tepid, and macroeconomic indicators remain weak. Stay invested. If you must buy, pick market-leading large-cap stocks.
Confluence of major festivals and big discounts failed to bring much cheer to auto makers during Oct '19. Maruti and Volkswagen showed marginal sales growth over Oct '18. Renault showed good gains. Hyundai and Toyota showed single-digit de-growth. The rest - cars, 2-wheelers, CVs - showed double-digit de-growth.
IHS Markit India's Manufacturing PMI slipped to a 2-year low of 50.6 in Oct '19 from 51.4 in Sep '19. (A number above 50 indicates expansion.) GST collection in Oct '19 was Rs 954 Billion, which was 3.8% higher than Sep '19 figure of Rs 919 Billion but 5.3% lower than Rs 1.01 Trillion collected in Oct '18.
As per CMIE, India's unemployment rate in Oct '19 climbed to 8.5% - the highest since Aug '16 - from 7.2% in Sep '19. A thriving economy has been brought to its knees by a poorly planned demonetisation and a hastily implemented GST.
BSE Sensex index chart pattern
Bulls came charging out of the gate after the Diwali break. The daily bar chart pattern of Sensex broke out convincingly above the (blue) down trend line on Tue. Oct 29, and rose to touch a new intra-day high of 40392 on Oct 31.
Bulls failed to press home their advantage despite strong equity buying by FIIs. By the end of the week, the index formed a small bearish 'rounding top' pattern that can trigger a correction.
Daily technical indicators are in overbought zones. MACD and RSI are showing upward momentum. ROC and Slow stochastic are showing slight downward momentum. ROC touched a lower top when the index touched a new high. Some near-term index consolidation or a pullback towards the down trend line is likely.
All three EMAs are rising, and the index is trading above them in a bull market. However, the index failed to close above its Jun 3 '19 life-time closing high of 40268 despite touching a new intra-day high of 40392. Bears may use the opportunity to launch an attack.
Profit booking can be expected when an index approaches a previous high. Investors remember what happened after the previous high was touched. Cautious optimism should be the key words here - not aggressive bullishness.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty closed convincingly above the (blue) down trend line on the back of strong FII buying. FIIs and DIIs had turned net sellers of equity a week ago, causing the index to pullback to the down trend line. Such pullbacks often provide buying opportunities.
However, the index is trading close to a lifetime high. It is a good idea to become fearful when everyone else is turning greedy. The weak macroeconomic indicators are suggesting that the market is running ahead of itself.
Weekly technical indicators are looking bullish and overbought. MACD and RSI are rising in their respective bullish zones. ROC and Slow stochastic are well inside their respective overbought zones. Some index consolidation or correction may be around the corner.
Nifty's TTM P/E has moved up to 27.47 - which is well above its long-term average inside overbought zone. The breadth indicator NSE TRIN (not shown) is treading water in neutral zone. Near-term index consolidation is a possibility.
Bottomline? Sensex and Nifty charts appear to have reversed 5 months long down trends. A cut in corporate taxes leading to better Q2 earnings has boosted bullish sentiments. Topline growth is tepid, and macroeconomic indicators remain weak. Stay invested. If you must buy, pick market-leading large-cap stocks.
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