20:08
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In a holiday-shortened trading week, FIIs were net sellers of equity on all four days. Their total net selling was worth Rs 32.6 Billion. DIIs were net buyers of equity on all four days of the week. Their total net buying was worth Rs 34.8 Billion, as per provisional figures.
Nikkei India's Manufacturing PMI for Sep. '19 was stagnant at 51.4 - same as in Aug '19. (A figure above 50 indicates growth.) The Services PMI for Sep. '19 contracted to a 19 month low of 48.7, from 52.4 in Aug '19. The Composite PMI (Manufacturing + Services) dropped below the 50 mark for the first time since Feb '18.
Major automobile makers - including Maruti, M&M, Hyundai, Tata Motors, Honda, Toyota - reported double digit declines in domestic passenger vehicle sales in Sep. '19. Onset of the festive season has failed to reverse the ongoing slump in the auto industry.
BSE Sensex index chart pattern
The 300 points upward 'gap' that formed on the daily bar chart pattern of Sensex on Mon. Sep 23 failed to support the index against a determined bear attack.
The index dropped steeply below the 'gap' on Tue. Oct 1, but found support from its 20 day EMA. The subsequent technical bounce faced resistance from the 'gap' and dropped to seek support from its 200 day EMA.
The (green) down trend line - drawn through the Jun '19 and Jul '19 tops - has dominated the Sensex chart for more than 4 months. RBI's 25 bps (0.25%) repo rate cut on Fri. Oct 4 failed to lift the market's mood, as the RBI Governor significantly reduced India's GDP growth estimate to 6.1%.
Daily technical indicators are looking bearish. MACD has formed a bearish 'rounding top' pattern, and is seeking support from its signal line in bullish zone. ROC (not shown) is falling towards its '0' line. RSI has dropped to its 50% level. Slow stochastic is falling towards its 50% level. Some more correction is likely.
Demonetisation and a hurriedly implemented GST has completely decimated the rural and unorganised sectors. Many small businesses have closed down. Larger businesses are more interested in cleaning up their balance sheets than making new investments.
Periodic economic booster doses by the Finance Minister have failed to revive bullish sentiments. Small investors can use the ongoing corrective phase to gradually add good large-cap stocks to their portfolios. Stay away from mid-cap, small-cap and PSU stocks.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty spent just a week above the (purple) up trend line before a bear onslaught forced a close below the trend line and the 20 week and 50 week EMAs.
The index continues to trade above its rising 200 week EMA in a long-term bull market. However, repeated breaches of a long-term up trend line should be treated with utmost caution.
Weekly technical indicators are looking neutral to bearish. MACD is below its signal line in bearish zone. ROC (not shown) is turning down after rising towards its neutral zone. RSI is trying to hang on to its 50% level. Slow stochastic is facing resistance from its 50% level. Some more index correction or consolidation is likely.
Nifty's TTM P/E has moved down to 25.75 - which remains well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) has re-entered its oversold zone after falling sharply from it. Some more near-term index correction is possible.
Bottomline? Sensex and Nifty charts are correcting after sharp upward breakouts. A cut in corporate taxes boosted bullish sentiment, but may not boost consumer demand. Both indices are hovering near support levels. Some more correction can't be ruled out.
Nikkei India's Manufacturing PMI for Sep. '19 was stagnant at 51.4 - same as in Aug '19. (A figure above 50 indicates growth.) The Services PMI for Sep. '19 contracted to a 19 month low of 48.7, from 52.4 in Aug '19. The Composite PMI (Manufacturing + Services) dropped below the 50 mark for the first time since Feb '18.
Major automobile makers - including Maruti, M&M, Hyundai, Tata Motors, Honda, Toyota - reported double digit declines in domestic passenger vehicle sales in Sep. '19. Onset of the festive season has failed to reverse the ongoing slump in the auto industry.
BSE Sensex index chart pattern
The 300 points upward 'gap' that formed on the daily bar chart pattern of Sensex on Mon. Sep 23 failed to support the index against a determined bear attack.
The index dropped steeply below the 'gap' on Tue. Oct 1, but found support from its 20 day EMA. The subsequent technical bounce faced resistance from the 'gap' and dropped to seek support from its 200 day EMA.
The (green) down trend line - drawn through the Jun '19 and Jul '19 tops - has dominated the Sensex chart for more than 4 months. RBI's 25 bps (0.25%) repo rate cut on Fri. Oct 4 failed to lift the market's mood, as the RBI Governor significantly reduced India's GDP growth estimate to 6.1%.
Daily technical indicators are looking bearish. MACD has formed a bearish 'rounding top' pattern, and is seeking support from its signal line in bullish zone. ROC (not shown) is falling towards its '0' line. RSI has dropped to its 50% level. Slow stochastic is falling towards its 50% level. Some more correction is likely.
Demonetisation and a hurriedly implemented GST has completely decimated the rural and unorganised sectors. Many small businesses have closed down. Larger businesses are more interested in cleaning up their balance sheets than making new investments.
Periodic economic booster doses by the Finance Minister have failed to revive bullish sentiments. Small investors can use the ongoing corrective phase to gradually add good large-cap stocks to their portfolios. Stay away from mid-cap, small-cap and PSU stocks.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty spent just a week above the (purple) up trend line before a bear onslaught forced a close below the trend line and the 20 week and 50 week EMAs.
The index continues to trade above its rising 200 week EMA in a long-term bull market. However, repeated breaches of a long-term up trend line should be treated with utmost caution.
Weekly technical indicators are looking neutral to bearish. MACD is below its signal line in bearish zone. ROC (not shown) is turning down after rising towards its neutral zone. RSI is trying to hang on to its 50% level. Slow stochastic is facing resistance from its 50% level. Some more index correction or consolidation is likely.
Nifty's TTM P/E has moved down to 25.75 - which remains well above its long-term average in overbought zone. The breadth indicator NSE TRIN (not shown) has re-entered its oversold zone after falling sharply from it. Some more near-term index correction is possible.
Bottomline? Sensex and Nifty charts are correcting after sharp upward breakouts. A cut in corporate taxes boosted bullish sentiment, but may not boost consumer demand. Both indices are hovering near support levels. Some more correction can't be ruled out.
Posted in: Indian Market
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