FIIs were net buyers of equity on Mon., Wed. and Fri. (Dec 9, 11 and 13) but were net sellers on the other two trading days. Their total net buying was worth Rs 1.3 Billion. DIIs were net buyers on all five trading days. Their total net buying was worth Rs 18.5 Billion - as per provisional figures.
India's CPI-based retail inflation rose to a 40 months high of 5.54% in Nov '19 from 4.62% in Oct '19 due to higher food prices. CPI-based inflation was 2.33% in Nov '18. The combination of falling GDP growth and rising inflation and unemployment may lead to stagflation.
For the second straight month, India's Index of Industrial Production (IIP) contracted. It was -3.8% YoY in Oct '19 - a slight improvement over -4.3% YoY in Sep '19. For the Apr-Oct '19 period, IIP was 0.5% against 5.7% during Apr-Oct '18.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex formed a 'reversal day' bar (lower low, higher close) on Wed. Dec 11 that triggered a sharp bounce above its 20 day EMA by Fri. Dec 13. FIIs turned buyers on expectation of a US-China trade deal.
The index is trading above its three daily EMAs in a bull market, and gained more than 560 points (1.4%) on a weekly closing basis.
Daily technical indicators are looking neutral to bullish. MACD is moving up towards its falling signal line in bullish zone. ROC has crossed above its 10 day MA in neutral zone. RSI and Slow stochastic are at their respective 50% levels. The index seems ready to rise to a new high.
The bull market may be entering a new upward phase after six weeks of sideways consolidation. Small investors would do well to not get sucked into it. There are very few signs of bottoming out in the economy, and most of the large-cap stocks leading the index rally are looking overvalued.
The government appears out of its depth in handling the country's self-inflicted economic woes. The hastily pushed through CAB bill - probably in an effort to manage headlines and divert attention - is having international repercussions as it has generated widespread internal protests.
Image building, vote catching, fear mongering and policy flip-flops have become the hallmarks of the current dispensation. This has generated a feeling of uncertainty among citizens, which is the exact opposite of the feel-good factor that is required to stimulate consumption and investment. For small investors, capital protection is the need of the hour.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty failed to close above its previous (Jun 7) top of 12103 for the third week in a row. The index is trading well above its three rising EMAs in a long-term bull market, and gained about 165 points (1.4%) on a weekly closing basis. It should be just a matter of time before the index rises higher.
However, the fact that the index is struggling to close above 12103 may encourage bears in the off chance that Nifty may be forming a 'double top' reversal pattern.
Such a pattern gets confirmed if volumes during formation of the second top is lower (not the case here) and if the index falls below its low of 10637 (touched on Aug 23). Looks like bulls need not worry too much about that.
Weekly technical indicators are looking bullish and overbought. MACD is rising above its signal line in bullish zone. ROC has crossed above its 10 week MA to re-enter its overbought zone. RSI has bounced up from the edge of its overbought zone. Slow stochastic is moving sideways inside its overbought zone. Bulls appear to be regaining control after a period of consolidation.
Nifty's TTM P/E has moved up to 28.17 - its highest level for the month and well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is falling inside its oversold zone, hinting at some more near-term index upside.
Bottomline? Sensex and Nifty charts have been consolidating after touching lifetime highs. Caution is advised due to rising CPI inflation, poor GDP and IIP numbers and a crisis of confidence among consumers. Stay invested, but avoid buying near lifetime high index levels.
India's CPI-based retail inflation rose to a 40 months high of 5.54% in Nov '19 from 4.62% in Oct '19 due to higher food prices. CPI-based inflation was 2.33% in Nov '18. The combination of falling GDP growth and rising inflation and unemployment may lead to stagflation.
For the second straight month, India's Index of Industrial Production (IIP) contracted. It was -3.8% YoY in Oct '19 - a slight improvement over -4.3% YoY in Sep '19. For the Apr-Oct '19 period, IIP was 0.5% against 5.7% during Apr-Oct '18.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex formed a 'reversal day' bar (lower low, higher close) on Wed. Dec 11 that triggered a sharp bounce above its 20 day EMA by Fri. Dec 13. FIIs turned buyers on expectation of a US-China trade deal.
The index is trading above its three daily EMAs in a bull market, and gained more than 560 points (1.4%) on a weekly closing basis.
Daily technical indicators are looking neutral to bullish. MACD is moving up towards its falling signal line in bullish zone. ROC has crossed above its 10 day MA in neutral zone. RSI and Slow stochastic are at their respective 50% levels. The index seems ready to rise to a new high.
The bull market may be entering a new upward phase after six weeks of sideways consolidation. Small investors would do well to not get sucked into it. There are very few signs of bottoming out in the economy, and most of the large-cap stocks leading the index rally are looking overvalued.
The government appears out of its depth in handling the country's self-inflicted economic woes. The hastily pushed through CAB bill - probably in an effort to manage headlines and divert attention - is having international repercussions as it has generated widespread internal protests.
Image building, vote catching, fear mongering and policy flip-flops have become the hallmarks of the current dispensation. This has generated a feeling of uncertainty among citizens, which is the exact opposite of the feel-good factor that is required to stimulate consumption and investment. For small investors, capital protection is the need of the hour.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty failed to close above its previous (Jun 7) top of 12103 for the third week in a row. The index is trading well above its three rising EMAs in a long-term bull market, and gained about 165 points (1.4%) on a weekly closing basis. It should be just a matter of time before the index rises higher.
However, the fact that the index is struggling to close above 12103 may encourage bears in the off chance that Nifty may be forming a 'double top' reversal pattern.
Such a pattern gets confirmed if volumes during formation of the second top is lower (not the case here) and if the index falls below its low of 10637 (touched on Aug 23). Looks like bulls need not worry too much about that.
Weekly technical indicators are looking bullish and overbought. MACD is rising above its signal line in bullish zone. ROC has crossed above its 10 week MA to re-enter its overbought zone. RSI has bounced up from the edge of its overbought zone. Slow stochastic is moving sideways inside its overbought zone. Bulls appear to be regaining control after a period of consolidation.
Nifty's TTM P/E has moved up to 28.17 - its highest level for the month and well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is falling inside its oversold zone, hinting at some more near-term index upside.
Bottomline? Sensex and Nifty charts have been consolidating after touching lifetime highs. Caution is advised due to rising CPI inflation, poor GDP and IIP numbers and a crisis of confidence among consumers. Stay invested, but avoid buying near lifetime high index levels.
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