FIIs were net buyers of equity for the second month in a row during Nov '19. Their total net buying was worth Rs 129.2 Billion - their highest monthly net buying since Apr '19. DIIs were net sellers of equity during Nov '19. Their total net selling was worth Rs 79.7 Billion - their highest monthly net selling since Apr '19.
India's GDP grew 4.5% during Q2 (Sep '19) against 7% during Q2 (Sep '18) - its slowest growth rate in more than 6 years - due to degrowth in manufacturing and a drop in exports. GDP grew 4.8% in H1 (Sep '19) against 7.5% in H1 (Sep '18).
India's fiscal deficit during Apr-Oct '19 was Rs 7.2 Trillion, which is 102.4% of the budgeted target of Rs 7.03 Trillion for FY 2019-20. Net tax receipts during Apr-Oct '19 was Rs 6.83 Trillion while total expenditure was Rs 16.55 Trillion.
BSE Sensex index chart pattern
After an upward breakout above the 39450 level on Oct 29, the daily bar chart pattern of Sensex entered a period of sideways consolidation within a 'rectangle'. An expected upward breakout from the 'rectangle' occurred on Nov 25 '19.
The index then rose to touch new intra-day (41164) and closing (41130) highs on Thu. Nov 28. Profit booking on Fri. Nov 29 caused a pullback to the top of the 'rectangle'.
All three EMAs are rising, and the index is trading above them in a bull market. The pullback is providing an opportunity to add. However, some consolidation or correction may follow as all four technical indicators are showing negative divergences by failing to touch new highs with the index.
Daily technical indicators are not showing upward momentum. MACD has crossed below its signal line and has slipped down from its overbought zone. ROC has dropped to seek support from 10 day MA in neutral zone. RSI is moving sideways above its 50% level. Slow stochastic is moving sideways inside its overbought zone.
The index has been rallying for the past two months on the back of FII buying. The poor GDP growth number appears to have been 'discounted' by the stock market. Traders and investors are hoping for more reforms by the government to kick-start the economic growth engine.
However, such hopes may be belied. The current dispensation is still in denial about the extent of the economic slowdown, and does not seem to have a clear plan of action that can stimulate investments and consumption. The corporate tax cut may get used to clean up account books.
At or near an all-time index high, small investors should always remember Falstaff's statement to King Henry IV: Discretion is the better part of valour.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty broke out above the previous three weeks' consolidation range, and touched new intra-week (12159) and closing (12056) highs. The index gained about 140 points (1.2%) for the week, and closed well above its three rising EMAs in a long-term bull market.
Note that the index is yet to close above its previous (Jun 7) top of 12103, but that is a small hurdle that bulls should be able to jump over easily. That does not mean small investors should rush into the market now.
Weekly technical indicators are looking bullish and overbought. MACD is rising above its signal line in bullish zone. ROC is sliding down inside its overbought zone. RSI has entered its overbought zone. Slow stochastic is moving sideways inside its overbought zone. Some index consolidation or correction is possible.
Nifty's TTM P/E touched the month's high of 28.32 on Thu. Nov 28, but moved down to 28.10 by Fri. Nov 29 - staying well above its long-term average inside overbought zone throughout the month. The breadth indicator NSE TRIN (not shown) oscillated in neutral zone throughout the month, even as the index rallied to touch a new high.
Bottomline? Sensex and Nifty charts touched lifetime highs, and are trading above their rising daily and weekly EMAs in long-term bull markets. Both indices can rise higher if FIIs continue their buying spree. Caution is advised due to the poor GDP and fiscal deficit numbers.
India's GDP grew 4.5% during Q2 (Sep '19) against 7% during Q2 (Sep '18) - its slowest growth rate in more than 6 years - due to degrowth in manufacturing and a drop in exports. GDP grew 4.8% in H1 (Sep '19) against 7.5% in H1 (Sep '18).
India's fiscal deficit during Apr-Oct '19 was Rs 7.2 Trillion, which is 102.4% of the budgeted target of Rs 7.03 Trillion for FY 2019-20. Net tax receipts during Apr-Oct '19 was Rs 6.83 Trillion while total expenditure was Rs 16.55 Trillion.
BSE Sensex index chart pattern
After an upward breakout above the 39450 level on Oct 29, the daily bar chart pattern of Sensex entered a period of sideways consolidation within a 'rectangle'. An expected upward breakout from the 'rectangle' occurred on Nov 25 '19.
The index then rose to touch new intra-day (41164) and closing (41130) highs on Thu. Nov 28. Profit booking on Fri. Nov 29 caused a pullback to the top of the 'rectangle'.
All three EMAs are rising, and the index is trading above them in a bull market. The pullback is providing an opportunity to add. However, some consolidation or correction may follow as all four technical indicators are showing negative divergences by failing to touch new highs with the index.
Daily technical indicators are not showing upward momentum. MACD has crossed below its signal line and has slipped down from its overbought zone. ROC has dropped to seek support from 10 day MA in neutral zone. RSI is moving sideways above its 50% level. Slow stochastic is moving sideways inside its overbought zone.
The index has been rallying for the past two months on the back of FII buying. The poor GDP growth number appears to have been 'discounted' by the stock market. Traders and investors are hoping for more reforms by the government to kick-start the economic growth engine.
However, such hopes may be belied. The current dispensation is still in denial about the extent of the economic slowdown, and does not seem to have a clear plan of action that can stimulate investments and consumption. The corporate tax cut may get used to clean up account books.
At or near an all-time index high, small investors should always remember Falstaff's statement to King Henry IV: Discretion is the better part of valour.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty broke out above the previous three weeks' consolidation range, and touched new intra-week (12159) and closing (12056) highs. The index gained about 140 points (1.2%) for the week, and closed well above its three rising EMAs in a long-term bull market.
Note that the index is yet to close above its previous (Jun 7) top of 12103, but that is a small hurdle that bulls should be able to jump over easily. That does not mean small investors should rush into the market now.
Weekly technical indicators are looking bullish and overbought. MACD is rising above its signal line in bullish zone. ROC is sliding down inside its overbought zone. RSI has entered its overbought zone. Slow stochastic is moving sideways inside its overbought zone. Some index consolidation or correction is possible.
Nifty's TTM P/E touched the month's high of 28.32 on Thu. Nov 28, but moved down to 28.10 by Fri. Nov 29 - staying well above its long-term average inside overbought zone throughout the month. The breadth indicator NSE TRIN (not shown) oscillated in neutral zone throughout the month, even as the index rallied to touch a new high.
Bottomline? Sensex and Nifty charts touched lifetime highs, and are trading above their rising daily and weekly EMAs in long-term bull markets. Both indices can rise higher if FIIs continue their buying spree. Caution is advised due to the poor GDP and fiscal deficit numbers.
1 comment:
good post
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