FIIs were net sellers of equity on Mon. & Wed. (Sep 3 & 5) but net buyers on Tue. (Sep 4). Their total net selling was worth Rs 3.7 Billion. DIIs were net sellers of equity on Mon. & Tue. but net buyers on Wed. Their total net selling was worth Rs 3.9 Billion, as per provisional figures.
India's manufacturing momentum slowed in Aug '18. Nikkei India's Manufacturing PMI eased to 51.7 from 52.3 in Jul '18 and 53.2 in Jun '18.
Nikkei India's Services PMI fell to 51.5 in Aug '18 from 54.2 in Jul '18 owing to weakest growth in new orders in three months. The Composite PMI (Manufacturing+Services) fell to 51.9 from 54.1 in Jul '18.
The following comments were made in last week's technical update on the daily bar chart pattern of Nifty: "For the past two months, the index has been trading within a steep upward-sloping channel. Such a steep rise - mainly led by a few large-cap stocks - is unsustainable for long."
The sharp rally within an upward-sloping trading channel has come to an end - as was expected. The index broke down below the channel on Mon. Sep 3 when both FIIs and DIIs turned sellers and continued downward on Tue. & Wed.
After correcting more than 350 points from the Aug 28 top of 11760 by slipping below 11400 today, the index recovered to 11477 - partly due to short-covering. The index has formed a 'hammer' candlestick pattern that can lead to a pullback towards the 20 day SMA (dotted green line).
On the downside, expect support from the lower Bollinger Band (at around 11300). Note that a penetration of the upper Bollinger Band - as had occurred on Aug 28 - is often followed by a corrective move.
The index is trading above its rising 50 day and 200 day EMAs, so there is no immediate threat to the bull market. However, some more correction can't be ruled out. In other words, don't jump into the market just yet.
Daily technical indicators are showing downward momentum after correcting overbought conditions. MACD has crossed below its signal line and is ready to drop from its overbought zone. RSI is seeking support from its 50% level. Slow stochastic is falling below its 50% level. All three are showing negative divergences by falling below their Aug 13th low of 11340.
Nifty's TTM P/E has moved down to 27.90 - still much higher than its long-term average. The breadth indicator NSE TRIN (not shown) has risen sharply from its overbought zone, and is hinting at some more correction.
Macro headwinds - particularly, high oil prices and a falling Rupee - now include lower manufacturing and services PMIs. Demonetisation fiasco has severely dented NDA government's credibility. There seems to be a sense of foreboding in the market about the outcome of 2019 general elections.
Stay invested, but remain cautious. Continue with SIPs, but avoid new stock ideas till the correction plays out.
Related Post
Should investors join the ‘Bollinger Bands’ wagon?
India's manufacturing momentum slowed in Aug '18. Nikkei India's Manufacturing PMI eased to 51.7 from 52.3 in Jul '18 and 53.2 in Jun '18.
Nikkei India's Services PMI fell to 51.5 in Aug '18 from 54.2 in Jul '18 owing to weakest growth in new orders in three months. The Composite PMI (Manufacturing+Services) fell to 51.9 from 54.1 in Jul '18.
The following comments were made in last week's technical update on the daily bar chart pattern of Nifty: "For the past two months, the index has been trading within a steep upward-sloping channel. Such a steep rise - mainly led by a few large-cap stocks - is unsustainable for long."
The sharp rally within an upward-sloping trading channel has come to an end - as was expected. The index broke down below the channel on Mon. Sep 3 when both FIIs and DIIs turned sellers and continued downward on Tue. & Wed.
After correcting more than 350 points from the Aug 28 top of 11760 by slipping below 11400 today, the index recovered to 11477 - partly due to short-covering. The index has formed a 'hammer' candlestick pattern that can lead to a pullback towards the 20 day SMA (dotted green line).
On the downside, expect support from the lower Bollinger Band (at around 11300). Note that a penetration of the upper Bollinger Band - as had occurred on Aug 28 - is often followed by a corrective move.
The index is trading above its rising 50 day and 200 day EMAs, so there is no immediate threat to the bull market. However, some more correction can't be ruled out. In other words, don't jump into the market just yet.
Daily technical indicators are showing downward momentum after correcting overbought conditions. MACD has crossed below its signal line and is ready to drop from its overbought zone. RSI is seeking support from its 50% level. Slow stochastic is falling below its 50% level. All three are showing negative divergences by falling below their Aug 13th low of 11340.
Nifty's TTM P/E has moved down to 27.90 - still much higher than its long-term average. The breadth indicator NSE TRIN (not shown) has risen sharply from its overbought zone, and is hinting at some more correction.
Macro headwinds - particularly, high oil prices and a falling Rupee - now include lower manufacturing and services PMIs. Demonetisation fiasco has severely dented NDA government's credibility. There seems to be a sense of foreboding in the market about the outcome of 2019 general elections.
Stay invested, but remain cautious. Continue with SIPs, but avoid new stock ideas till the correction plays out.
Related Post
Should investors join the ‘Bollinger Bands’ wagon?
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