In a holiday-shortened week, FIIs were net buyers of equity on all three trading days - worth Rs 44.2 Billion. (The last time they were net buyers three days in a row was back in the 3rd week of Dec '19.) DIIs were net buyers of equity on Tue. Apr 7, but net sellers on Wed. and Thu. (Apr 8 and 9). Their net selling was worth Rs 18.0 Billion, as per provisional figures.
India's Manufacturing Purchase Manager's Index (PMI) declined to a 4 month low of 51.8 in Mar '20 from 54.5 in Feb '20. Services PMI contracted to 49.3 in Mar '20 from 57.5 in Feb '20. The Composite (Manufacturing + Services) PMI fell to 50.6 in Mar '20 from 57.6 in Feb '20. (A figure above 50 indicates expansion.)
India's Index of Industrial Production (IIP) rose to a 7 month high of 4.5% in Feb '20 against 0.2% in Feb '19 due to pickup in mining and electricity output. During Apr '19-Feb '20, cumulative IIP was only 0.9% against 4% in the Apr '18-Feb '19 period.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex rallied sharply on the back of FII buying, and closed above its falling 20 day EMA for the first time in more than a month. In just three days of trading, the index gained more than 3500 points (12.9%) on a weekly closing basis.
Bulls would do well not to get carried away. During the past three weeks, Sensex has been consolidating sideways with an upward bias, and appears to have formed a bearish 'rising wedge' pattern.
Such a pattern often forms in the middle of a down move. If the pattern plays out, the expected downward breakout can drop the index to much lower levels. Before it can do so, some more upside - towards 32000-33000 - can't be ruled out.
Daily technical indicators are looking bullish after correcting oversold conditions. MACD is rising above its signal line and has emerged from it oversold zone. RSI is rising towards its 50% level. Slow stochastic has risen sharply to enter its overbought zone, and can trigger some correction or consolidation.
Sensex is trading well below its falling 200 day EMA in a bear market. Rallies in a bear market are usually sharp and swift. Those who are betting on an index revival in the near-term can get caught in a bull trap.
Extension of the lock-down period by two more weeks is an indication that the corona virus is far from being controlled. Economic growth is going to take a huge hit and may take a year or two to recover. Tough days ahead.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty closed higher after 7 weeks of lower closes. On a weekly closing basis, the index gained more than 1000 points (12.7%) in just three days of trading in a holiday-shortened week. However, it closed well below its 200 week EMA for the fifth straight week.
The 20 week EMA is about to cross below the 200 week EMA for the first time in 9 years. All three weekly EMAs are falling, which is a sign of a long-term bear market. The 'death cross' of the 50 week EMA below the 200 week EMA - which will technically confirm a long-term bear market - is still awaited.
Weekly technical indicators are beginning to correct oversold conditions. MACD is falling deeper inside its oversold zone, but its downward momentum is decelerating. RSI has just about managed to emerge from its oversold zone. Slow stochastic has again bounced up from the edge of its oversold zone. Any further rally may bring bears to the fore.
Nifty's TTM P/E has moved up to 20.53, which is above its long-term average. The breadth indicator NSE TRIN (not shown) has fallen a bit inside its oversold zone. Some near-term index consolidation is likely.
Bottomline? Sensex and Nifty charts have closed well below their respective 200 week EMAs for the fifth straight week, and are trading in long-term bear markets. Extension of the corona virus lockdown by two more weeks can push an economy already devastated by twin shocks of demonetisation and unplanned GST implementation into a recession. Small investors can continue with their SIPs, but should avoid any lump sum buying.
India's Manufacturing Purchase Manager's Index (PMI) declined to a 4 month low of 51.8 in Mar '20 from 54.5 in Feb '20. Services PMI contracted to 49.3 in Mar '20 from 57.5 in Feb '20. The Composite (Manufacturing + Services) PMI fell to 50.6 in Mar '20 from 57.6 in Feb '20. (A figure above 50 indicates expansion.)
India's Index of Industrial Production (IIP) rose to a 7 month high of 4.5% in Feb '20 against 0.2% in Feb '19 due to pickup in mining and electricity output. During Apr '19-Feb '20, cumulative IIP was only 0.9% against 4% in the Apr '18-Feb '19 period.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex rallied sharply on the back of FII buying, and closed above its falling 20 day EMA for the first time in more than a month. In just three days of trading, the index gained more than 3500 points (12.9%) on a weekly closing basis.
Bulls would do well not to get carried away. During the past three weeks, Sensex has been consolidating sideways with an upward bias, and appears to have formed a bearish 'rising wedge' pattern.
Such a pattern often forms in the middle of a down move. If the pattern plays out, the expected downward breakout can drop the index to much lower levels. Before it can do so, some more upside - towards 32000-33000 - can't be ruled out.
Daily technical indicators are looking bullish after correcting oversold conditions. MACD is rising above its signal line and has emerged from it oversold zone. RSI is rising towards its 50% level. Slow stochastic has risen sharply to enter its overbought zone, and can trigger some correction or consolidation.
Sensex is trading well below its falling 200 day EMA in a bear market. Rallies in a bear market are usually sharp and swift. Those who are betting on an index revival in the near-term can get caught in a bull trap.
Extension of the lock-down period by two more weeks is an indication that the corona virus is far from being controlled. Economic growth is going to take a huge hit and may take a year or two to recover. Tough days ahead.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty closed higher after 7 weeks of lower closes. On a weekly closing basis, the index gained more than 1000 points (12.7%) in just three days of trading in a holiday-shortened week. However, it closed well below its 200 week EMA for the fifth straight week.
The 20 week EMA is about to cross below the 200 week EMA for the first time in 9 years. All three weekly EMAs are falling, which is a sign of a long-term bear market. The 'death cross' of the 50 week EMA below the 200 week EMA - which will technically confirm a long-term bear market - is still awaited.
Weekly technical indicators are beginning to correct oversold conditions. MACD is falling deeper inside its oversold zone, but its downward momentum is decelerating. RSI has just about managed to emerge from its oversold zone. Slow stochastic has again bounced up from the edge of its oversold zone. Any further rally may bring bears to the fore.
Nifty's TTM P/E has moved up to 20.53, which is above its long-term average. The breadth indicator NSE TRIN (not shown) has fallen a bit inside its oversold zone. Some near-term index consolidation is likely.
Bottomline? Sensex and Nifty charts have closed well below their respective 200 week EMAs for the fifth straight week, and are trading in long-term bear markets. Extension of the corona virus lockdown by two more weeks can push an economy already devastated by twin shocks of demonetisation and unplanned GST implementation into a recession. Small investors can continue with their SIPs, but should avoid any lump sum buying.
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