FIIs were net buyers of equity on all five trading days during the week. Their total net buying was worth Rs 54.5 Billion. DIIs were net sellers of equity on all five trading days, but could not keep pace with FII buying. Their total net selling was worth Rs 30.56 Billion.
SEBI had introduced certain restrictions on F&O trading to curb volatility on Mar 20. These restrictions, including limits on holding short positions, have been extended till Sep 24. Bulls are expected to drive home their advantage.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex moved up relentlessly on the back of strong FII buying and closed at its highest level in 6 months. Bears have been pushed back to the last ditch - a 335 points downward 'gap' that had formed on Feb 28th, a few days before the index crashed.
The index has already closed just above the 'gap' zone. It appears unlikely that bears will be able to put up much of a fight. An index up move to a new lifetime high may occur sooner than later.
All three EMAs are rising, and the index is trading above them - and above the (blue) up trend line - in a bull market. The 'golden cross' (of the 50 day EMA above the 200 day EMA - marked by light blue circle) had technically confirmed a return to a bull market. Bears are on the verge of throwing in the towel.
Daily technical indicators are looking bullish and a bit overbought. MACD is moving sideways after merging with its signal line in bullish zone. ROC is rising above its 10 day MA in bullish zone. RSI has just entered its overbought zone. Slow stochastic is moving sideways well inside its overbought zone.
Despite poor Q1 (Apr-Jun '20) corporate earnings and a likely contraction in GDP, analysts are projecting higher earnings two years forward to justify current stretched index valuations.
Small investors should remain wary, because no one really knows how long the pandemic will continue to devastate the already slowing economy and what corporate earnings will look like two years down the road.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty closed above its three weekly EMAs in long-term bull territory for the 8th straight week. The index moved above the psychological 11500 to its highest level in 6 months.
Weekly technical indicators are looking bullish and overbought. MACD is rising above its signal line and has entered its overbought zone. RSI continues its gradual rise above its 50% level. Slow stochastic is moving sideways well inside its overbought zone.
Nifty's TTM P/E touched a new lifetime high of 32.92, which is well above its long-term average and deep inside its overbought zone. The breadth indicator NSE TRIN (not shown) is falling sharply in neutral zone, hinting at some more near-term index upside.
Bottomline? Bulls are regaining control on Sensex and Nifty charts. Bears are clearly on the back foot - thanks to SEBI restrictions on short selling. Some more upside is likely. Stay on the sidelines and wait for better entry opportunities on dips.
No comments:
Post a Comment