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FIIs were net buyers of equity on Mon. and Thu. (Sep 23 and 26), but were net sellers on Tue., Wed. and Fri. (Sep. 24, 25 and 27). Their total net buying was worth Rs 20.4 Billion. DIIs were net sellers of equity on Wed., but were net buyers during the other four days of the week. Their total net buying was worth Rs 8.0 Billion, as per provisional figures.
As on Sep 26, countrywide rainfall figure is 107% of its long period average, as per the India Meteorological Dept. With more than 2 weeks to go before monsoon recedes, the figure could touch 110% (putting it in the 'excess' category after staying 'below normal' for five straight years).
According to a recent UNCTAD report, India's GDP growth will moderate to 6% in 2019 from 7.4% in 2018 due to lower than targetted tax collections and limited public spending.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex formed a 300 points upward 'gap' on Mon. Sep 23 and touched an intra-day high of 39441. It was the highest level touched by the index since the post-budget sell-off began on Jul 8 '19. In the process, 'death cross' of the 50 day EMA below the 200 day EMA was prevented.
On Wed. Sep 25, the index dropped inside the 'gap' zone - partly filling it - before bouncing up the next day. The 'gap' should act as a floor on the down side. It may take a couple of weeks for the index to 'digest' the sharp two-day rally before it resumes its quest to touch a new high.
Daily technical indicators are in bullish zones, but only MACD is showing upward momentum by rising above its signal line. ROC (not shown) is hovering above the edge of its overbought zone. RSI is moving sideways above its 50% level. Slow stochastic is sliding down inside its overbought zone. Some more consolidation above the 'Gap' is likely.
Small investors should suppress the 'left out' feeling after missing the unexpectedly sharp rally. This is not the right time to jump into the market feet first - despite entreatments by brokers and experts on business TV channels.
Cutting out the 'noise', keeping cool, and following an investment plan is what generates wealth over the long-term. Do your homework, choose fundamentally strong stocks, and hold on to them for many years. Getting in and out of the market willy-nilly due to news headlines is a recipe for financial disaster.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty had spent seven straight weeks below its 50 day EMA, and the (purple) up trend line drawn through its Dec '16 and Oct '18 lows. Just when it seemed that the bears were getting the upper hand, a corporate tax cut announced on Sep 20 sent short sellers scurrying for cover.
The index rose above the up trend line, tested resistance from the 11700 level, closed above 11500 after ten weeks, and is back above its three weekly EMAs in a long-term bull market. A new high by Diwali won't be a surprise.
Weekly technical indicators are turning bullish. MACD has formed a bullish 'rounding bottom' pattern below its signal line in bearish zone. ROC (not shown) is rising towards its neutral zone. RSI has crossed above its 50% level. Slow stochastic has risen to its 50% level. Some more near-term index upside is possible.
Nifty's TTM P/E has moved down to 26.52 - which remains well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is oscillating near the edge of its oversold zone, hinting at near-term index consolidation.
Bottomline? Sensex and Nifty charts are consolidating after sharp upward breakouts following seven weeks of sideways consolidation. A cut in corporate taxes boosted bullish sentiment, but will it boost consumer demand? Both indices are within 5% of their lifetime highs. It is a time for cautious optimism - not euphoria.
As on Sep 26, countrywide rainfall figure is 107% of its long period average, as per the India Meteorological Dept. With more than 2 weeks to go before monsoon recedes, the figure could touch 110% (putting it in the 'excess' category after staying 'below normal' for five straight years).
According to a recent UNCTAD report, India's GDP growth will moderate to 6% in 2019 from 7.4% in 2018 due to lower than targetted tax collections and limited public spending.
BSE Sensex index chart pattern
The daily bar chart pattern of Sensex formed a 300 points upward 'gap' on Mon. Sep 23 and touched an intra-day high of 39441. It was the highest level touched by the index since the post-budget sell-off began on Jul 8 '19. In the process, 'death cross' of the 50 day EMA below the 200 day EMA was prevented.
On Wed. Sep 25, the index dropped inside the 'gap' zone - partly filling it - before bouncing up the next day. The 'gap' should act as a floor on the down side. It may take a couple of weeks for the index to 'digest' the sharp two-day rally before it resumes its quest to touch a new high.
Daily technical indicators are in bullish zones, but only MACD is showing upward momentum by rising above its signal line. ROC (not shown) is hovering above the edge of its overbought zone. RSI is moving sideways above its 50% level. Slow stochastic is sliding down inside its overbought zone. Some more consolidation above the 'Gap' is likely.
Small investors should suppress the 'left out' feeling after missing the unexpectedly sharp rally. This is not the right time to jump into the market feet first - despite entreatments by brokers and experts on business TV channels.
Cutting out the 'noise', keeping cool, and following an investment plan is what generates wealth over the long-term. Do your homework, choose fundamentally strong stocks, and hold on to them for many years. Getting in and out of the market willy-nilly due to news headlines is a recipe for financial disaster.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty had spent seven straight weeks below its 50 day EMA, and the (purple) up trend line drawn through its Dec '16 and Oct '18 lows. Just when it seemed that the bears were getting the upper hand, a corporate tax cut announced on Sep 20 sent short sellers scurrying for cover.
The index rose above the up trend line, tested resistance from the 11700 level, closed above 11500 after ten weeks, and is back above its three weekly EMAs in a long-term bull market. A new high by Diwali won't be a surprise.
Weekly technical indicators are turning bullish. MACD has formed a bullish 'rounding bottom' pattern below its signal line in bearish zone. ROC (not shown) is rising towards its neutral zone. RSI has crossed above its 50% level. Slow stochastic has risen to its 50% level. Some more near-term index upside is possible.
Nifty's TTM P/E has moved down to 26.52 - which remains well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) is oscillating near the edge of its oversold zone, hinting at near-term index consolidation.
Bottomline? Sensex and Nifty charts are consolidating after sharp upward breakouts following seven weeks of sideways consolidation. A cut in corporate taxes boosted bullish sentiment, but will it boost consumer demand? Both indices are within 5% of their lifetime highs. It is a time for cautious optimism - not euphoria.
Posted in: Indian Market
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