FIIs were net sellers of equity on Mon. Nov 4, but were net buyers during the next four days. Their total net buying was worth Rs 32.0 Billion. DIIs were net sellers of equity during all five trading days of the week. Their total net selling was worth Rs 44.3 Billion.
Net inflows into equity funds during Oct '19 fell 10.25% to Rs 60.4 Billion from Rs 67.3 Billion in Sep '19. On a YoY basis, it fell 52.1% from Rs 126.2 Billion in Oct '18.
The bull rally in the market stalled after twin shocks from Moody's and Nomura. Moody's downgraded India's credit rating outlook to 'negative' from 'stable' - reflecting lower policy effectiveness and a gradual rise in debt. Nomura cut India's GDP forecast for FY 2019-20 to 4.9% from the earlier 5.7%.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex touched new closing (40421 on Nov 7) and intra-day (40749 on Nov 8) highs during the week on the back of strong FII buying. The index closed well above its three rising EMAs in a bull market.
However, on Fri. Nov 8, the index formed a 'reversal day' bar (higher high, lower close) that often marks an intermediate top. Twin downgrades by Moody's and Nomura triggered profit booking.
Daily technical indicators are correcting overbought conditions. MACD is above its rising signal line inside its overbought zone, but is turning down. ROC and RSI have dropped to the edges of their respective overbought zones. Slow stochastic has started sliding down inside its overbought zone. Some more index correction or consolidation is likely.
Investors are flocking to a few quality large-cap stocks. That has boosted the index to a new high. Mid-cap and small-cap stocks are still struggling. Macroeconomic indicators continue to weaken.
Despite government pronouncements, there is no reason to believe that all is well with India's economy. The decimation of rural and unorganised sectors (thanks to demo and GST) and periodic efforts at bringing foreign investors and companies to heel have ruined India's investment climate.
Under the circumstances, staying invested and starting a SIP in an index fund/ETF may be the sane thing to do. Revival in mid-cap and small-cap stocks is not likely to happen anytime soon.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty rose above the psychological 12000 level during the week, but fell short of its lifetime high of 12103. Though the index gained 17 odd points on a weekly closing basis, it failed to close above 12000.
Weekly technical indicators are looking bullish and overbought. MACD is rising above its signal line in bullish zone. RSI has climbed to the edge of its overbought zone. ROC and Slow stochastic are well inside their respective overbought zones, but are showing signs of correcting. Some index consolidation or correction is likely.
Nifty's TTM P/E touched a high of 27.75 on Thu. Nov 7 before slipping down to 27.51 - which is well above its long-term average inside overbought zone. The breadth indicator NSE TRIN (not shown) has dropped sharply towards the edge of its overbought zone. More near-term index consolidation is possible.
Bottomline? Sensex and Nifty charts are trading well above their rising daily and weekly EMAs in long-term bull markets. Both indices are close to their lifetime highs. Stay invested. Try to avoid bottom-fishing in beaten-down stocks.
Net inflows into equity funds during Oct '19 fell 10.25% to Rs 60.4 Billion from Rs 67.3 Billion in Sep '19. On a YoY basis, it fell 52.1% from Rs 126.2 Billion in Oct '18.
The bull rally in the market stalled after twin shocks from Moody's and Nomura. Moody's downgraded India's credit rating outlook to 'negative' from 'stable' - reflecting lower policy effectiveness and a gradual rise in debt. Nomura cut India's GDP forecast for FY 2019-20 to 4.9% from the earlier 5.7%.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex touched new closing (40421 on Nov 7) and intra-day (40749 on Nov 8) highs during the week on the back of strong FII buying. The index closed well above its three rising EMAs in a bull market.
However, on Fri. Nov 8, the index formed a 'reversal day' bar (higher high, lower close) that often marks an intermediate top. Twin downgrades by Moody's and Nomura triggered profit booking.
Daily technical indicators are correcting overbought conditions. MACD is above its rising signal line inside its overbought zone, but is turning down. ROC and RSI have dropped to the edges of their respective overbought zones. Slow stochastic has started sliding down inside its overbought zone. Some more index correction or consolidation is likely.
Investors are flocking to a few quality large-cap stocks. That has boosted the index to a new high. Mid-cap and small-cap stocks are still struggling. Macroeconomic indicators continue to weaken.
Despite government pronouncements, there is no reason to believe that all is well with India's economy. The decimation of rural and unorganised sectors (thanks to demo and GST) and periodic efforts at bringing foreign investors and companies to heel have ruined India's investment climate.
Under the circumstances, staying invested and starting a SIP in an index fund/ETF may be the sane thing to do. Revival in mid-cap and small-cap stocks is not likely to happen anytime soon.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty rose above the psychological 12000 level during the week, but fell short of its lifetime high of 12103. Though the index gained 17 odd points on a weekly closing basis, it failed to close above 12000.
Weekly technical indicators are looking bullish and overbought. MACD is rising above its signal line in bullish zone. RSI has climbed to the edge of its overbought zone. ROC and Slow stochastic are well inside their respective overbought zones, but are showing signs of correcting. Some index consolidation or correction is likely.
Nifty's TTM P/E touched a high of 27.75 on Thu. Nov 7 before slipping down to 27.51 - which is well above its long-term average inside overbought zone. The breadth indicator NSE TRIN (not shown) has dropped sharply towards the edge of its overbought zone. More near-term index consolidation is possible.
Bottomline? Sensex and Nifty charts are trading well above their rising daily and weekly EMAs in long-term bull markets. Both indices are close to their lifetime highs. Stay invested. Try to avoid bottom-fishing in beaten-down stocks.
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