FIIs
were net buyers of equity on Mon. and Fri. (Jul 13 and 17), but
were net sellers on the other three days. Their total net selling was
worth Rs 19.59 Billion. DIIs were net buyers on Thu. Jul 16, but were net
sellers on the rest four days. Their total net selling was worth Rs 15.84 Billion.
Sensex and Nifty each gained about 1.2% for the week. Like in the previous week, the indices gained while FIIs and DIIs were both net sellers. Small investors who may have entered the market recently should learn the concept of a stop-loss - otherwise their 'paper' profits can vanish in a hurry.
India's usual trade deficit turned into a surplus in Jun '20 for the first time since Jan '02. Exports contracted 12.4% to US $21.9 Billion; imports contracted 47.6% to $21.1 Billion - leaving a surplus of about $800 Million. The sharp drop in imports indicates a slump in domestic demand.
BSE Sensex index chart pattern
For the second week in a row, the daily bar chart pattern of Sensex spent the entire trading week above its three daily EMAs in bull territory. On Tue. Jul 14, the index broke out below the 'rising wedge' pattern, only to pullback along the lower trend line of the 'wedge' during the rest of the week.
Note that the larger up trend line - drawn through the Mar '20 and May '20 lows remains intact. Only a downward breach of this trend line can bring bears back into the game. On the upside, resistance can be expected from a 640 points downward 'gap' formed on Mar 6th.
Daily technical indicators are in bullish zones. MACD is moving sideways after merging with its signal line. ROC is trying to cross above its 10 day MA. RSI has re-entered its overbought zone. Slow stochastic is about to follow suit.
All four indicators are showing negative divergences by failing to rise higher with the index, which closed at its highest level in 4 months. The index has rallied almost 11500 points (45%) from its Mar 24th low, even as the country is being ravaged by a pandemic.
The disconnect between a bullish market that has gained mainly on the back of a single stock (RIL), and the grim reality of an economy falling into a recession is staggering. It will take a long time for the economy to recover and corporate earnings to get back on track.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty closed above its three weekly EMAs for the second straight week, and above the 10900 level for the first time in 4 months. Two gaps got filled in the process - the downward 'gap' of week ending Mar 13th, and the upward 'gap' formed last week.
The 20 week EMA has formed a bullish 'rounding bottom' pattern and is poised to cross above the 200 week EMA. On the upside, the 'support-resistance' zone between 11000-11250 can provide bullied bears a last opportunity to put up some resistance.
Weekly technical indicators are looking bullish. MACD continues to rise above its signal line in bearish zone. The signal line has formed a bullish 'rounding bottom' pattern. RSI is slowly rising above its 50% level. Slow stochastic is moving sideways well inside its overbought zone.
Nifty's TTM P/E has moved up to 28.55, its highest level for the month and well inside its overbought zone. The breadth indicator NSE TRIN (not shown) is hovering in neutral zone, and may limit near-term index upside.
Bottomline? Ongoing rallies on Sensex and Nifty charts have overcome important resistance levels and re-entered bull territories. There are clear signs of 'distribution' from strong to weaker hands. Caution is advised.
Sensex and Nifty each gained about 1.2% for the week. Like in the previous week, the indices gained while FIIs and DIIs were both net sellers. Small investors who may have entered the market recently should learn the concept of a stop-loss - otherwise their 'paper' profits can vanish in a hurry.
India's usual trade deficit turned into a surplus in Jun '20 for the first time since Jan '02. Exports contracted 12.4% to US $21.9 Billion; imports contracted 47.6% to $21.1 Billion - leaving a surplus of about $800 Million. The sharp drop in imports indicates a slump in domestic demand.
BSE Sensex index chart pattern
For the second week in a row, the daily bar chart pattern of Sensex spent the entire trading week above its three daily EMAs in bull territory. On Tue. Jul 14, the index broke out below the 'rising wedge' pattern, only to pullback along the lower trend line of the 'wedge' during the rest of the week.
Note that the larger up trend line - drawn through the Mar '20 and May '20 lows remains intact. Only a downward breach of this trend line can bring bears back into the game. On the upside, resistance can be expected from a 640 points downward 'gap' formed on Mar 6th.
Daily technical indicators are in bullish zones. MACD is moving sideways after merging with its signal line. ROC is trying to cross above its 10 day MA. RSI has re-entered its overbought zone. Slow stochastic is about to follow suit.
All four indicators are showing negative divergences by failing to rise higher with the index, which closed at its highest level in 4 months. The index has rallied almost 11500 points (45%) from its Mar 24th low, even as the country is being ravaged by a pandemic.
The disconnect between a bullish market that has gained mainly on the back of a single stock (RIL), and the grim reality of an economy falling into a recession is staggering. It will take a long time for the economy to recover and corporate earnings to get back on track.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty closed above its three weekly EMAs for the second straight week, and above the 10900 level for the first time in 4 months. Two gaps got filled in the process - the downward 'gap' of week ending Mar 13th, and the upward 'gap' formed last week.
The 20 week EMA has formed a bullish 'rounding bottom' pattern and is poised to cross above the 200 week EMA. On the upside, the 'support-resistance' zone between 11000-11250 can provide bullied bears a last opportunity to put up some resistance.
Weekly technical indicators are looking bullish. MACD continues to rise above its signal line in bearish zone. The signal line has formed a bullish 'rounding bottom' pattern. RSI is slowly rising above its 50% level. Slow stochastic is moving sideways well inside its overbought zone.
Nifty's TTM P/E has moved up to 28.55, its highest level for the month and well inside its overbought zone. The breadth indicator NSE TRIN (not shown) is hovering in neutral zone, and may limit near-term index upside.
Bottomline? Ongoing rallies on Sensex and Nifty charts have overcome important resistance levels and re-entered bull territories. There are clear signs of 'distribution' from strong to weaker hands. Caution is advised.
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