For the month of Jan '20, FIIs were net sellers of equity worth Rs 53.6 Billion. They turned net sellers after three straight months of net buying. DIIs were net buyers of equity during Jan '20. Their total net buying was worth Rs 10.7 Billion, as per provisional figures.
The union budget speech by the Finance Minister on Feb 1 was long on sound, sycophancy and needless repetition but short on actionable steps required to boost consumption for stimulating the economy. Investors showed their displeasure by voting with their feet.
Low consumer sentiment continued to affect auto sales in Jan '20. Maruti showed a marginal growth in YoY sales, but Hyundai, M&M and Tata Motors showed negative growth.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex had touched a lifetime high of 42274 on Jan 20th, but formed a large 'reversal day' bar (higher high, lower close). That had triggered a corrective move below its 20 day and 50 day EMAs.
A disappointing budget led to a 1000 points fall in the index during the special trading session on Sat. Feb 1. The index has found temporary support at its 200 day EMA. Any technical bounce may induce a 'sell on rise' strategy by bears.
Daily technical indicators are looking bearish. MACD is falling below its signal line and has entered bearish zone. RSI is seeking support from the edge of its oversold zone. Slow stochastic has re-entered its oversold zone, but is showing positive divergence by touching a higher bottom. A technical bounce is likely.
Small investors should remain patient and not rush in to buy the dip. The market may face a major corrective move.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty dropped sharply below its 20 week EMA - thanks to a union budget that disappointed the stock market - but found support at its 50 week EMA. For the past 18 months, the index has formed a bullish pattern of 'higher tops, higher bottoms'.
The index is trading well above its rising 200 week EMA in a long-term bull market. However, a weak economy and global concerns about the spreading corona virus has poured cold water on bullish sentiments.
Weekly technical indicators are looking bearish. MACD has dropped from its overbought zone and crossed below its signal line. RSI has dropped below its 50% level. Slow stochastic has dropped from its overbought zone towards its 50% level.
After touching a high of 28.67 on Jan 13 and Jan 14, Nifty's TTM P/E moved down to 26.41 by the end of the month, but remained well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) has re-entered its oversold zone after falling from it. Some more near-term index correction is possible.
Bottomline? After touching lifetime highs in Jan '20, Sensex and Nifty charts look ready for deeper corrections, triggered by a disappointing union budget. There are hardly any positive triggers left for the stock market in the near-term. Small investors should use any rise to book profits and preserve capital.
The union budget speech by the Finance Minister on Feb 1 was long on sound, sycophancy and needless repetition but short on actionable steps required to boost consumption for stimulating the economy. Investors showed their displeasure by voting with their feet.
Low consumer sentiment continued to affect auto sales in Jan '20. Maruti showed a marginal growth in YoY sales, but Hyundai, M&M and Tata Motors showed negative growth.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex had touched a lifetime high of 42274 on Jan 20th, but formed a large 'reversal day' bar (higher high, lower close). That had triggered a corrective move below its 20 day and 50 day EMAs.
A disappointing budget led to a 1000 points fall in the index during the special trading session on Sat. Feb 1. The index has found temporary support at its 200 day EMA. Any technical bounce may induce a 'sell on rise' strategy by bears.
Daily technical indicators are looking bearish. MACD is falling below its signal line and has entered bearish zone. RSI is seeking support from the edge of its oversold zone. Slow stochastic has re-entered its oversold zone, but is showing positive divergence by touching a higher bottom. A technical bounce is likely.
Small investors should remain patient and not rush in to buy the dip. The market may face a major corrective move.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty dropped sharply below its 20 week EMA - thanks to a union budget that disappointed the stock market - but found support at its 50 week EMA. For the past 18 months, the index has formed a bullish pattern of 'higher tops, higher bottoms'.
The index is trading well above its rising 200 week EMA in a long-term bull market. However, a weak economy and global concerns about the spreading corona virus has poured cold water on bullish sentiments.
Weekly technical indicators are looking bearish. MACD has dropped from its overbought zone and crossed below its signal line. RSI has dropped below its 50% level. Slow stochastic has dropped from its overbought zone towards its 50% level.
After touching a high of 28.67 on Jan 13 and Jan 14, Nifty's TTM P/E moved down to 26.41 by the end of the month, but remained well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) has re-entered its oversold zone after falling from it. Some more near-term index correction is possible.
Bottomline? After touching lifetime highs in Jan '20, Sensex and Nifty charts look ready for deeper corrections, triggered by a disappointing union budget. There are hardly any positive triggers left for the stock market in the near-term. Small investors should use any rise to book profits and preserve capital.
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