In a holiday-curtailed trading week, FIIs were net buyers of equity on Mon. and Wed. (Nov 11 and 13), but were net sellers during Thu. and Fri. (Nov 14 and 15). Their total net selling was worth Rs 3.2 Billion. DIIs were net sellers of equity on Mon. and Wed., but were net buyers on the last two days. Their total net selling was worth Rs 5.1 Billion.
The macroeconomic indicators are hinting at deeper trouble. IIP contracted 4.3% in Sep '19 to its lowest level in 8 years. CPI inflation rose 4.62% in Oct '19 - to a 16 months high. WPI inflation eased to 0.16% in Oct '19 - to a 3 years low due to a fall in prices of fuel, power and manufactured goods.
Exports contracted 1.11% to US $26.38 Billion in Oct '19, while imports fell 16.31% to $37.39 Billion, leaving a lower trade deficit of $11 Billion against $18 Billion in Oct '18. Consumer spending fell for the first time in 4 decades in FY 2017-18 - driven by slack rural demand - according to a survey by NSO, which the government has decided to suppress.
BSE Sensex index chart pattern
After touching new intra-day and closing highs a week ago, the daily bar chart pattern of Sensex consolidated sideways with a slight downward bias. The index is trading above its three rising EMAs in a bull market, and gained 33 points on a weekly closing basis.
Daily technical indicators are giving conflicting signals. MACD has crossed below its rising signal line inside its overbought zone. ROC has dropped to its neutral zone. RSI is moving sideways along the edge of its overbought zone. Slow stochastic has slipped down from its overbought zone. Some more index consolidation or correction is likely.
On the daily closing Sensex and BSE 500 charts (not shown), last week's trading showed breakouts below small 'head and shoulders' patterns followed by pullbacks to the 'necklines' of the patterns. A correction below the 20 day EMA is a possibility.
Q2 (Sep '19) results of India Inc. showed a marginal drop in revenues - the first decline in 9 quarters - due to slower demand, de-stocking of inventories and a higher base effect. However, net profits grew in double digits, thanks to the tax rate cut for companies.
The stock market seems worried about the Q2 (Sep '19) GDP number, which may drop below 5%. FIIs may have turned net sellers on Thu. and Fri. in anticipation of a low number. Best to sit on the sidelines for now.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty consolidated with a downward bias below the psychological 12000 level during the week. The index lost 13 odd points on a weekly closing basis, but traded well above its three weekly EMAs in a long-term bull market.
Weekly technical indicators are looking bullish and overbought. MACD is rising above its signal line in bullish zone. RSI is facing resistance from the edge of its overbought zone. ROC and Slow stochastic are moving sideways inside their respective overbought zones. Some more index consolidation or correction is possible.
Nifty's TTM P/E has slipped down to 27.32 - which is well above its long-term average inside overbought zone. The breadth indicator NSE TRIN (not shown) is oscillating in neutral zone, hinting at more near-term index consolidation.
Bottomline? Sensex and Nifty charts are consolidating well above their rising daily and weekly EMAs in long-term bull markets. Both indices are close to their lifetime highs. Stay invested, but this is not a good time to buy - unless you are adept at stock picking.
The macroeconomic indicators are hinting at deeper trouble. IIP contracted 4.3% in Sep '19 to its lowest level in 8 years. CPI inflation rose 4.62% in Oct '19 - to a 16 months high. WPI inflation eased to 0.16% in Oct '19 - to a 3 years low due to a fall in prices of fuel, power and manufactured goods.
Exports contracted 1.11% to US $26.38 Billion in Oct '19, while imports fell 16.31% to $37.39 Billion, leaving a lower trade deficit of $11 Billion against $18 Billion in Oct '18. Consumer spending fell for the first time in 4 decades in FY 2017-18 - driven by slack rural demand - according to a survey by NSO, which the government has decided to suppress.
BSE Sensex index chart pattern
After touching new intra-day and closing highs a week ago, the daily bar chart pattern of Sensex consolidated sideways with a slight downward bias. The index is trading above its three rising EMAs in a bull market, and gained 33 points on a weekly closing basis.
Daily technical indicators are giving conflicting signals. MACD has crossed below its rising signal line inside its overbought zone. ROC has dropped to its neutral zone. RSI is moving sideways along the edge of its overbought zone. Slow stochastic has slipped down from its overbought zone. Some more index consolidation or correction is likely.
On the daily closing Sensex and BSE 500 charts (not shown), last week's trading showed breakouts below small 'head and shoulders' patterns followed by pullbacks to the 'necklines' of the patterns. A correction below the 20 day EMA is a possibility.
Q2 (Sep '19) results of India Inc. showed a marginal drop in revenues - the first decline in 9 quarters - due to slower demand, de-stocking of inventories and a higher base effect. However, net profits grew in double digits, thanks to the tax rate cut for companies.
The stock market seems worried about the Q2 (Sep '19) GDP number, which may drop below 5%. FIIs may have turned net sellers on Thu. and Fri. in anticipation of a low number. Best to sit on the sidelines for now.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty consolidated with a downward bias below the psychological 12000 level during the week. The index lost 13 odd points on a weekly closing basis, but traded well above its three weekly EMAs in a long-term bull market.
Weekly technical indicators are looking bullish and overbought. MACD is rising above its signal line in bullish zone. RSI is facing resistance from the edge of its overbought zone. ROC and Slow stochastic are moving sideways inside their respective overbought zones. Some more index consolidation or correction is possible.
Nifty's TTM P/E has slipped down to 27.32 - which is well above its long-term average inside overbought zone. The breadth indicator NSE TRIN (not shown) is oscillating in neutral zone, hinting at more near-term index consolidation.
Bottomline? Sensex and Nifty charts are consolidating well above their rising daily and weekly EMAs in long-term bull markets. Both indices are close to their lifetime highs. Stay invested, but this is not a good time to buy - unless you are adept at stock picking.
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