FIIs were net buyers of equity on all five trading days. Their total net buying was worth Rs 48.9 Billion. DIIs were net sellers of equity on all five trading days. Their total net selling was worth Rs 37.5 Billion - as per provisional figures.
According to a CARE Ratings report, production of consumer non-durables (i.e. FMCG products) moderated to 4% in FY 2018-19 from 10.5% growth in FY 2017-18 due to a sluggish economy and limited growth in employment. However, 14 items among the 36 taken into consideration showed increase in growth.
Fitch Ratings have cut India's GDP growth forecast to 4.6% for FY 2019-20 from the previous estimate of 5.6% due to significant growth deceleration in the past few quarters - thanks to credit squeeze and deterioration in business and consumer confidence.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex rose to touch new intra-day (41810) and closing (41682) highs during the week on the back of strong buying in equities by FIIs. The index is trading well above its three rising EMAs in a bull market.
Daily technical indicators are looking bullish and a bit overbought. MACD has crossed above its signal line in bullish zone. ROC has crossed above its 10 day MA and entered its overbought zone. RSI is hovering just below the edge of its overbought zone. Slow stochastic is well inside its overbought zone, and can trigger a correction or some consolidation.
Bull markets are supposed to climb 'a wall of worries' - and there are plenty of worries for Indian investors. Apart from a sliding economy and rising inflation with a possibility of stagflation, divisive forces have now been unleashed by the government's determined effort to implement CAA and NRC.
That may be a great tactic to win votes in upcoming state elections after a few recent setbacks and divert the nation's attention from gross mismanagement of the economy. But nationwide protests have added to the fear and uncertainty that have already damaged business and consumer confidence.
The lack of buying euphoria is an indication that Sensex may climb even higher. But without investor participation in the broader market (i.e. mid-cap and small-cap stocks), the rally in a few large-cap stocks will peter out sooner than later. Hold on to good large-cap stocks, but avoid buying them at current elevated valuations.
NSE Nifty index chart pattern
After struggling for three weeks, the weekly bar chart pattern of Nifty broke out and closed above its Jun 7 top of 12103, and touched new intra-week (12294) and closing (12272) highs.
The index is trading well above its three rising weekly EMAs in a long-term bull market, and gained 185 points (1.5%) on a weekly closing basis. However, small investors should not get carried away by a rising index.
Note that Nifty has been trading within a large 'rising wedge' pattern for the past three months. Such a pattern has bearish implications - particularly when it forms at an index top. Falling volumes during the past three weeks is another concern for bulls.
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 in complete control.
Nifty's TTM P/E has moved up to 28.57 - its highest level for the month and well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) has plunged inside its overbought zone, and can trigger some near-term index consolidation or correction.
Bottomline? Sensex and Nifty charts have touched lifetime highs on the back of strong FII buying. Rising CPI inflation, poor GDP and IIP numbers, a crisis of confidence among consumers and nationwide protests against the Citizen Amendment Act (CAA) do not justify a soaring stock market. Stay invested, but book partial profits wherever available, and avoid buying near lifetime high index levels.
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.
FIIs were net buyers of equity on all five trading days. Their total net buying was worth Rs 32.1 Billion. DIIs were net sellers of equity on Mon. and Thu. (Oct 14 and 17), but net buyers on the other three days of the week. Their total net buying was worth Rs 21.8 Billion, as per provisional figures.
According to a Nielsen report, India's FMCG market clocked a value growth of 7.3% during Q2 (Sep '19) - down from 16.2% during Q2 (Sep '18) - as rural growth dropped below urban growth for the first time in 7 years.
The IMF has supported India's monetary policy stimulus and recent reduction in corporate income tax, which are expected to help revive investment. However, India should address continued fiscal consolidation and the NBFC issues.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex got a sharp bullish boost as FIIs turned buyers during the week. The index breached the (blue) down trend line that has dominated the chart for the past four months.
The breakout hasn't been a technically convincing one yet, because accompanying volumes (not shown) were not significantly higher during the trend line breach. That can change if FIIs continue to buy, and small investors decide to join the bandwagon.
Daily technical indicators are looking bullish. MACD is moving above its signal line in bullish zone. ROC is poised to enter its overbought zone. RSI is above its 50% level. Slow stochastic has entered its overbought zone. More near-term index upside is possible, but some consolidation or correction may follow.
All three EMAs are rising, and the index is trading well above them in a bull market. If FIIs continue their buying spree, the market may celebrate a new index high by Diwali.
Just a handful of large-cap stocks - like RIL, HUL, HDFC Bank - are leading the rally. Small investors who are itching to jump into the market should follow a SIP mode when buying stocks. Avoid lump sum buying in beaten down small-cap stocks.
The stock market provides opportunities during bull and bear phases. However, buying near an all-time index high is not a great idea.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty rallied to breach the (blue) down trend line, thanks to strong buying by FIIs. The break out has not been a convincing one yet, but that can change if FIIs continue buying.
Weekly technical indicators are looking neutral to bullish. MACD and RSI are at their respective neutral zones, but showing upward momentum. ROC has risen to the edge of its overbought zone. Slow stochastic is rising above its 50% level. Some more near-term index upside is possible.
Nifty's TTM P/E has moved up to 26.94 - which is well above its long-term average inside overbought zone. The breadth indicator NSE TRIN (not shown) is falling in neutral zone, and can limit near-term index upside.
Bottomline? Sensex and Nifty charts have breached their 4 months old down trend lines. A cut in corporate taxes, followed by FII buying have boosted bullish sentiments. Both indices might try to touch new highs by Diwali.
S&P 500 index chart pattern
The daily bar chart pattern of S&P 500 seems to have brushed aside feeble bear resistance. The index bounced up after receiving support from its rising 20 day EMA and touched a new high of 3028 on Fri. Jul 26.
The index gained 49 points (1.6%) on a weekly closing basis, and is trading above its three rising EMAs in a bull market. However, bears are refusing to give up. Volumes were heaviest on Thu. Jul 25 - the only down day during the week. A sign that 'smart money' is getting out?
Daily technical indicators are in bullish zones but showing weak upward momentum. MACD is moving sideways below its falling signal line. RSI is moving sideways above its 50% level. Slow stochastic has re-entered its overbought zone.
All three indicators are showing negative divergences by failing to touch new highs with the index. Some correction or consolidation may follow.
On longer term weekly chart (not shown), the index closed well above its three rising weekly EMAs in a long-term bull market, but has formed a 'broadening top' reversal pattern since Jan '18. Weekly technical indicators are looking overbought and showing negative divergences by failing to touch new highs.
FTSE 100 index chart pattern
The daily bar chart pattern of FTSE 100 continued its sideways consolidation with a downward bias for the third straight week. The index touched a high of 7599 in bull territory on Tue. Jul 23, but dropped below its 20 day EMA the very next day.
FTSE dropped to seek support from its 50 day EMA on Thu. Jul 25. On Fri. Jul 26, the index bounced up above its 20 day EMA to close above its three EMAs in bull territory - at 7549 (gaining 40 points for the week).
Daily technical indicators are turning bullish. MACD is moving sideways below its falling signal line in bullish zone. RSI and Stochastic are rising above their respective 50% levels. The index seems ready to resume its up move.
On longer term weekly chart (not shown), the index closed above its three weekly EMAs in long-term bull territory for the 8th straight week. Weekly technical indicators are showing upward momentum in bullish zones. MACD is rising above its signal line. RSI is moving up above its 50% level. Stochastic is rising inside its overbought zone.
S&P 500 index chart pattern
Overbought technical indicators had led to the following comment in last week's post on the daily bar chart pattern of S&P 500: "Some consolidation or correction is possible."
The index touched a new high of 3018 on Mon. Jul 15, but succumbed to profit booking and dropped to test support from its 20 day EMA. The index formed a 'reversal day' bar (lower low, higher close) on Thu. Jul 18, just as it had done on Tue. Jul 9, but failed to rally - losing 37 points (1.2%) on a weekly closing basis.
The index is trading above its three rising EMAs in a bull market. However, Friday's 'reversal day' bar (higher high, lower close) and strong volumes on last week's three down days show that bears are still alive and kicking.
Daily technical indicators are looking bearish. MACD crossed below its signal line and dropped from its overbought zone. RSI and Slow stochastic are falling towards their respective 50% levels. Another test of support from the 2954 level is a possibility.
On longer term weekly chart (not shown), the index closed well above its three rising weekly EMAs in a long-term bull market, but formed a 'reversal' bar (higher high, lower close). Weekly technical indicators are beginning to correct overbought conditions - hinting at some consolidation or correction.
FTSE 100 index chart pattern
The daily bar chart pattern of FTSE 100 consolidated sideways with a downward bias for the second straight week. Like in the previous week, the index closed above the support level of 7529 during the first three days, but slipped below 7500 and its 20 day EMA on Thu. Jun 18.
On Fri. Jul 19, the index recovered to move above its three EMAs into bull territory, and closed almost flat on a weekly closing basis at 7509. FTSE appears to be forming a bullish 'flag' pattern from which an upward breakout is likely.
Daily technical indicators have turned bearish. MACD is falling below its signal line in bullish zone. RSI is falling towards its 50% level. Stochastic has dropped to the edge of its oversold zone, and can trigger a technical bounce.
On longer term weekly chart (not shown), the index closed above its three weekly EMAs in long-term bull territory for the 7th straight week. Weekly technical indicators are in bullish zones but not showing any upward momentum. MACD is moving sideways above its signal line. RSI is also moving sideways above its 50% level. Stochastic is hovering at the edge of its overbought zone.
WTI Crude Oil chart
The following comment was made in the previous post on the daily bar chart pattern of WTI Crude Oil: "Falling volumes during the technical bounce may encourage bears to defend the 200 day EMA vigorously."
Oil's price dropped below its 50 day and 20 day EMAs, but bounced up after receiving support from the 56 level. After crossing above all three EMAs into bull territory, oil's price formed a small 'reversal day' bar (higher high, lower close) and pulled back to its 200 day EMA.
Daily technical indicators are in bullish zones. MACD is rising above its signal line. RSI is above its 50% level but showing slight downward momentum. Slow stochastic re-entered its overbought zone, but is slipping down.
Bears are giving ground grudgingly. Oil's price has formed a bullish pattern of 'higher tops, higher bottoms' after forming a 'double bottom' reversal pattern inside the support zone between 50 and 52. A convincing price move above 67 is necessary if bulls are to regain control of the chart.
On longer term weekly chart (not shown), oil's price managed to close just above its 200 week EMA in long-term bull territory. Weekly technical indicators are in neutral zones, and not showing much upward momentum. Falling volumes during the recent rally should be a concern for bulls.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude Oil dropped below its 20 day EMA into bear territory, but bounced up after receiving good support from the 62 level.
Oil's price rallied past its 20 day and 50 day EMAs, only to face strong resistance from its 200 day EMA. Strong volumes on recent down days show that bears are active.
Daily technical indicators are looking neutral to bullish. MACD is rising above its signal line in neutral zone. RSI is moving sideways above its 50% level. Slow stochastic re-entered its overbought zone, but is falling down. Some more consolidation is likely.
Bears are giving bulls a hard time. Oil's price has formed a bullish pattern of 'higher tops, higher bottoms' after forming a 'double bottom' reversal pattern inside the support zone between 58 and 60. A convincing price move above 75 is required for bulls to regain control of the chart.
On longer term weekly chart (not shown), oil's price closed above its 200 week and 20 week EMAs, but just below its 50 week EMA in long-term bull territory. Weekly technical indicators are looking neutral to bullish. MACD is below its sliding signal line in neutral zone. RSI is facing resistance from its 50% level. Slow stochastic is rising towards its 50% level.
Gold chart pattern
The following comments appeared in the previous post on the daily bar chart pattern of Gold: "...the rally has been a bit too steep. Some profit booking is likely to emerge soon."
After a sharp upward breakout with good volume support above a 'Cup and Handle' pattern, gold's price twice tested the 1440 level - forming a small 'double top' reversal pattern.
A pullback towards the rising 20 day EMA and some sideways consolidation followed. Gold's price is trading above its three rising EMAs in a bull market.
Daily technical indicators are correcting overbought conditions. MACD has crossed below its signal line inside its overbought zone. RSI has fallen from its overbought zone. Slow stochastic formed a 'double top' pattern before dropping from its overbought zone.
The US Dollar index dropped to a low of 95.36 on Jun 25, triggering the sharp rally in Gold's price. Since then, the Dollar Index has recovered smartly past 97 - keeping a lid on further upside in price.
On longer term weekly chart (not shown), gold’s price closed well above its three rising weekly EMAs in long-term bull territory. Weekly technical indicators are beginning to correct overbought conditions. Some more price consolidation or correction can follow.
Silver chart pattern
The following comments appeared in the previous post on the daily bar chart pattern of Silver: "Slow stochastic is consolidating at the edge of its overbought zone. Some price consolidation/correction can be expected."
Silver's price consolidated sideways above its 200 day EMA before forming a small 'double top' reversal pattern and corrected down to its 50 day EMA.
Daily technical indicators are turning bearish. MACD formed a small bearish 'rounding top' pattern and crossed below its signal line. RSI has dropped to seek support from its 50% level. Slow stochastic has slipped below its 50% level. Some more price correction or consolidation is likely.
On longer term weekly chart (not shown), silver's price closed at its 20 week EMA, but below its 50 week EMA and well below its sliding 200 week EMA in a long-term bear market. Weekly technical indicators are looking bullish to neutral, but not showing any upward momentum.
S&P 500 index chart pattern
The following comment appeared in last week's post on the daily bar chart pattern of S&P 500: "It is just a matter of time before bulls overcome bear resistance at the 2954 level."
A holiday-shortened trading week started well for bulls. On Mon. Jul 1, the index formed an upward 'gap' and broke out above the resistance level of 2954. However, the upward breakout was not accompanied by a significant increase in volumes - keeping the door open for a pullback.
The index rose to touch a new high of 2996 on Jul 3, but faced profit booking and formed a bearish 'hanging man' candlestick on Fri. Jul 5 - closing slightly lower at 2990 with a 1.6% weekly gain.
Daily technical indicators are looking bullish and overbought. MACD is above its rising signal line inside its overbought zone. RSI has slipped down after briefly entering its overbought zone. Slow stochastic has re-entered its overbought zone.
Note that the technical indicators are showing negative divergences by failing to touch new highs with the index. A pullback towards 2954 and/or some consolidation is likely. All three EMAs are rising, and the index is trading well above them in a bull market.
On longer term weekly chart (not shown), the index closed well above its three rising weekly EMAs in a long-term bull market. Weekly technical indicators are looking bullish and overbought, and showing negative divergences by failing to touch new highs with the index.
FTSE 100 index chart pattern
The following comment appeared in last week's post on the daily bar chart pattern of FTSE 100: "Technical confirmation of the 'cup and handle' pattern is still awaited..."
By breaking out and closing above the previous (Apr 23) top of 7529 on Jul 2, formation of the 'cup and handle' pattern has been technically confirmed. Note that there was no significant increase in volumes during the upward breakout.
As often happens to an upward breakout without volume support, the rally petered out after the index touched an intra-day high of 7622 on Jul 4. A pullback towards 7529 is in progress. Such pullbacks provide opportunities to add.
Daily technical indicators are in bullish zones but not showing any upward momentum. MACD is rising above its signal line, but its upward momentum has weakened. RSI and Stochastic have dropped from their respective overbought zones.
On longer term weekly chart (not shown), the index closed above its three weekly EMAs in long-term bull territory for the fifth straight week. Weekly technical indicators are looking bullish. MACD has crossed above its signal line in bullish zone. RSI is rising above its 50% level. Stochastic has entered its overbought zone. Some consolidation or correction is possible.
WTI Crude Oil chart
The daily bar chart pattern of WTI Crude Oil bounced up from the support zone (between 50-52) and rose smartly above its 20 day and 50 day EMAs before facing stiff resistance at the 200 day EMA.
After two consecutive closes just above the 200 day EMA in bull territory on Jun 26 and 27, oil's price dropped down to seek support from its 50 day EMA on Jun 28. It bounced up to close just below its 200 day EMA on Jul 1.
Daily technical indicators are looking neutral to bullish. MACD is above its rising signal line in neutral zone. RSI is moving sideways above its 50% level. Slow stochastic is sliding down inside its overbought zone.
Falling volumes during the technical bounce may encourage bears to defend the 200 day EMA vigorously.
On longer term weekly chart (not shown), oil's price faced strong resistance from its 200 week EMA and dropped to close just above its 20 week EMA in long-term bear territory. Weekly technical indicators are at their respective neutral zones. Only Slow stochastic is showing upward momentum.
Brent Crude Oil chart
The daily bar chart pattern of Brent Crude Oil bounced up from the support zone (between 58-60) and rose above its 20 day EMA, only to face strong resistance from its 50 day EMA.
For the past seven trading sessions, oil's price has been consolidating sideways between its 20 day and 50 day EMAs. On Jul 1, it formed a long-legged 'doji' candlestick pattern that indicates indecision among bulls and bears.
Daily technical indicators are giving conflicting signals. MACD is rising above its signal line in bearish zone. RSI is moving sideways along its 50% level. Slow stochastic is poised to drop down from its overbought zone. Some more consolidation or correction is likely.
On longer term weekly chart (not shown), oil's price faced resistance from its 200 week EMA, and closed below its three weekly EMAs in long-term bear territory for the fifth straight week. Weekly technical indicators are in bearish zones. Only Slow stochastic is showing some upward momentum.
S&P 500 index chart pattern
The following comment appeared in last week's post on the daily bar chart pattern of S&P 500: "Some more consolidation is possible before the index attempts to scale a new high."
The sideways consolidation continued on Mon. Jun 17. Next day, the index formed an upward 'gap' that triggered a dash towards the previous (May 1) top of 2954. On Thu. Jun 20, the index touched a new high of 2958, but closed exactly at its previous top of 2954.
On Fri. Jun 21, the index touched another new high of 2964 with a volume surge, but closed lower at 2950 - forming a small 'reversal day' bar (higher high, lower close). A 'reversal day' bar at a market top can trigger a correction.
Failure to close convincingly above its previous top leaves the door open for the formation of a 'double top' reversal pattern - which will get confirmed only if the index falls below 2729 (the low touched on Jun 3).
Daily technical indicators are in bullish zones, but only MACD is showing some upward momentum. MACD is rising above its signal line in bullish zone. RSI has slipped down after facing resistance from the edge of its overbought zone. Slow stochastic is moving sideways well inside its overbought zone.
All three indicators are showing negative divergences by failing to touch new highs with the index. Expect bears to put up a fight to defend the 2954 level. But it might be a 'fight for a cause long ago forgotten'. The index closed above its three rising EMAs in a bull market.
On longer term weekly chart (not shown), the index closed well above its three weekly EMAs in a long-term bull market. Weekly technical indicators are moving up in bullish zones, but showing negative divergences by failing to touch new highs with the index.
FTSE 100 index chart pattern
The daily bar chart pattern of FTSE 100 bounced up after receiving good support from its 20 day EMA, and rose to touch the week's high of 7469 on Tue. Jun 18. Bears got into the act, preventing the index from making further upward progress.
The volume spike on Fri. Jun 21 may be the sign of a selling climax. The index managed to close above the 7400 level and its three EMAs in bull territory, with a weekly gain of 0.8%.
Daily technical indicators are in bullish zones but only MACD is showing upward momentum. MACD is rising above its signal line in bullish zone. RSI is moving sideways above its 50% level. Stochastic has dropped to the edge of its overbought zone after re-entering it.
A convincing close above the previous (Apr 23) top of 7529 is required for bulls to regain control of the chart, and technically confirm completion of a bullish 'cup and handle' pattern (clearly visible on the 50 day EMA).
On longer term weekly chart (not shown), the index closed above its three weekly EMAs in long-term bull territory for the third straight week. Weekly technical indicators are turning bullish. MACD is about to cross above its signal line in bullish zone. RSI and Stochastic are rising above their respective 50% levels. Some more upside seems likely.
S&P 500 index chart pattern
The following comments appeared in last week's post on the daily bar chart pattern of S&P 500: "The week's rally was accompanied by sliding volumes. A pullback towards the down trend line is a possibility."
The index touched an intra-day high of 2911 on Tue. Jun 11, but pulled back towards the (purple) down trend line, forming a 'reversal day' bar (higher high, lower close).
A sideways consolidation in a range of 20 points (2875 - 2895) followed. The index closed above its three EMAs in a bull market, and eked out a 0.5% weekly gain.
Daily technical indicators are in bullish zones, but not showing any upward momentum. MACD has crossed above its signal line to enter bullish zone. RSI is moving sideways above its 50% level. Slow stochastic is moving sideways inside its overbought zone.
Some more consolidation is possible before the index attempts to scale a new high.
On longer term weekly chart (not shown), the index closed above its three weekly EMAs in a long-term bull market, but formed a 'doji' candlestick indicating indecision among bulls and bears. Weekly technical indicators are looking bullish to neutral. MACD is moving sideways below its signal line. RSI has moved above its 50% level after falling below it. Slow stochastic has moved up to its 50% level after falling below it.
FTSE 100 index chart pattern
The following comments appeared in last week's post on the daily bar chart pattern of FTSE 100: "Near-term index upside may be limited. Sliding volumes during last week's rally can encourage bears to 'sell on rise'."
The index touched an intra-day high of 7421 and closed just below 7400 on Tue. Jun 11 - negating the bearish 'head and shoulders' pattern (refer last week's post). Bulls failed to press home their advantage, and bears stepped in to sell as expected.
The index received support from its 20 day EMA, and closed above its three EMAs in bull territory. Strong volumes on the two down days indicate bears are in no mood to give up without a fight.
Daily technical indicators are in bullish zones but showing downward momentum. MACD crossed above its signal line to enter bullish zone, but is turning down. RSI is falling towards its 50% level. Stochastic has slipped down from its overbought zone.
A fall and a test of support from the 200 day EMA may be on the cards.
On longer term weekly chart (not shown), the index closed above its three weekly EMAs in long-term bull territory, but formed a 'shooting star' candlestick pattern that can trigger some correction or consolidation . Weekly technical indicators are in bullish zones, but not showing any upward momentum.
