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For the month of Aug '19, FIIs were net sellers of equity worth Rs 148.3 Billion. It was their fourth straight month of net selling. DIIs more than matched them. They were net buyers of equity worth Rs 209.3 Billion, as per provisional figures.
India's GDP growth slumped to 5% during Apr-Jun '19 - lowest growth in 6 years; much lower than 8% growth during Apr-Jun '18, and even lower than 5.8% growth during Jan-Mar '19.
India's fiscal deficit during Apr-Jul '19 stood at Rs 5.47 Trillion, which is nearly 78% of the full year (FY 2019-20) deficit target of Rs 7.03 Trillion. Revenue collection is weak due to the economic slowdown.
BSE Sensex index chart pattern
The following comments were made in last week's post on the daily bar chart pattern of Sensex: "All four indicators are showing positive divergences...by rising higher while the index dropped lower. That is a clear signal that precedes a technical bounce."
Finance Minister's first 'booster package' was announced on Fri. Aug 23 after close of day's trading. Bullish fervour was evident on Mon. Aug 26. The index bounced up above the 37100 level and its 20 day EMA before facing resistance at its 200 day EMA.
On Tue. Aug 27, Sensex closed above its 200 day EMA but couldn't move above its falling 50 day EMA. Bear selling resumed on Wed., and the index closed below its 200 day EMA. There was more selling on Thu. Aug 29 (monthly F&O settlement day). The index dropped to close just below 37100.
On Fri. Aug 30, FIIs were net buyers along with DIIs. Sensex formed a 'reversal day' bar (lower low, higher close) and climbed above the 37100 level but closed below its 200 day EMA in bear territory.
The index gained more than 630 points (1.7%) on a weekly closing basis. The 'support zone' (between 37100 and 35900) provided very good support to Sensex during Aug '19. Will the support hold during Sep '19? The poor GDP number can turn out to be the 'joker in the pack'.
Daily technical indicators are looking neutral to bearish. MACD is rising above its signal line in bearish zone. ROC is facing resistance from its 10 day MA in neutral zone. RSI is seeking support from its neutral zone. Slow stochastic has dropped from its overbought zone.
Finance Minister announced a second 'booster package' after close of trade on Fri. Aug 30. This time it was a proposed merger of 10 smaller PSU banks to form four larger banks. Will it positively influence credit off-take in the near-term? Seems very unlikely.
The stock market wants 'big bang' labour reform and land reform plus scrapping of LTCG to revive bullish sentiment. Instead, it is getting peripheral reforms in dribs and drabs and lectures on fitness, holidays within India, and 'all is well' in Kashmir. Be prepared for more listless index performance - if not a crash.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty moved above the 11100 level intra-week - as it had done in each of the past three weeks - but failed to move above its 50 week EMA once again.
The index corrected to close inside the 'support zone' (between 11100 and 10700) for the fifth straight week, but gained almost 194 points (1.8%) on a weekly closing basis.
Weekly technical indicators are looking bearish and oversold. MACD is falling below its signal line. ROC is below its falling 10 week MA, and is trying to emerge from its oversold zone. RSI has slipped inside its oversold zone. Slow stochastic is moving sideways along the edge of its oversold zone.
Nifty's TTM P/E has moved up to 27.27 - which is above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is moving up inside its oversold zone. Some near-term index downside or consolidation is possible.
Bottomline? Sensex and Nifty charts are at long-term support zones. A couple of 'booster packages' announced by Finance Minister has failed to revive bullish sentiment. A lower-than-expected Q1 (Jun '19) GDP figure and the ongoing US-China trade spat are not going to help the cause of bulls. Small investors should stay on the sidelines, but not stop their SIPs.
India's GDP growth slumped to 5% during Apr-Jun '19 - lowest growth in 6 years; much lower than 8% growth during Apr-Jun '18, and even lower than 5.8% growth during Jan-Mar '19.
India's fiscal deficit during Apr-Jul '19 stood at Rs 5.47 Trillion, which is nearly 78% of the full year (FY 2019-20) deficit target of Rs 7.03 Trillion. Revenue collection is weak due to the economic slowdown.
BSE Sensex index chart pattern
The following comments were made in last week's post on the daily bar chart pattern of Sensex: "All four indicators are showing positive divergences...by rising higher while the index dropped lower. That is a clear signal that precedes a technical bounce."
Finance Minister's first 'booster package' was announced on Fri. Aug 23 after close of day's trading. Bullish fervour was evident on Mon. Aug 26. The index bounced up above the 37100 level and its 20 day EMA before facing resistance at its 200 day EMA.
On Tue. Aug 27, Sensex closed above its 200 day EMA but couldn't move above its falling 50 day EMA. Bear selling resumed on Wed., and the index closed below its 200 day EMA. There was more selling on Thu. Aug 29 (monthly F&O settlement day). The index dropped to close just below 37100.
On Fri. Aug 30, FIIs were net buyers along with DIIs. Sensex formed a 'reversal day' bar (lower low, higher close) and climbed above the 37100 level but closed below its 200 day EMA in bear territory.
The index gained more than 630 points (1.7%) on a weekly closing basis. The 'support zone' (between 37100 and 35900) provided very good support to Sensex during Aug '19. Will the support hold during Sep '19? The poor GDP number can turn out to be the 'joker in the pack'.
Daily technical indicators are looking neutral to bearish. MACD is rising above its signal line in bearish zone. ROC is facing resistance from its 10 day MA in neutral zone. RSI is seeking support from its neutral zone. Slow stochastic has dropped from its overbought zone.
Finance Minister announced a second 'booster package' after close of trade on Fri. Aug 30. This time it was a proposed merger of 10 smaller PSU banks to form four larger banks. Will it positively influence credit off-take in the near-term? Seems very unlikely.
The stock market wants 'big bang' labour reform and land reform plus scrapping of LTCG to revive bullish sentiment. Instead, it is getting peripheral reforms in dribs and drabs and lectures on fitness, holidays within India, and 'all is well' in Kashmir. Be prepared for more listless index performance - if not a crash.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty moved above the 11100 level intra-week - as it had done in each of the past three weeks - but failed to move above its 50 week EMA once again.
The index corrected to close inside the 'support zone' (between 11100 and 10700) for the fifth straight week, but gained almost 194 points (1.8%) on a weekly closing basis.
Weekly technical indicators are looking bearish and oversold. MACD is falling below its signal line. ROC is below its falling 10 week MA, and is trying to emerge from its oversold zone. RSI has slipped inside its oversold zone. Slow stochastic is moving sideways along the edge of its oversold zone.
Nifty's TTM P/E has moved up to 27.27 - which is above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is moving up inside its oversold zone. Some near-term index downside or consolidation is possible.
Bottomline? Sensex and Nifty charts are at long-term support zones. A couple of 'booster packages' announced by Finance Minister has failed to revive bullish sentiment. A lower-than-expected Q1 (Jun '19) GDP figure and the ongoing US-China trade spat are not going to help the cause of bulls. Small investors should stay on the sidelines, but not stop their SIPs.
Posted in: Indian Market
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