FIIs were net buyers of equity on Thu. Dec 5, but net sellers on the other four trading days. Their total net selling was worth Rs 38.6 Billion. DIIs were net sellers of equity on Thu. Dec 5, but were net buyers on the other four days. Their total net buying was worth Rs 24.2 Billion - as per provisional figures.
According to ACMA, auto component sales during Apr-Sep '19 declined 10% YoY to Rs 1.79 Trillion. However, exports grew 3% to Rs 514 Billion, and after-market sales grew 4% to Rs 351 Billion.
As per a Dun & Bradstreet report, India's GDP growth is expected to remain subdued in the near future as the slowdown has deepened and is likely to remain extended for a longer period than previously anticipated.
BSE Sensex index Chart pattern
After touching lifetime intra-day and closing highs on Thu. Nov 28, the daily bar chart pattern of Sensex has been in a corrective mode. Profit booking often follows a new index top. Negative divergences visible on all four technical indicators - which failed to touch new tops - had also hinted at some consolidation or correction.
The index is trading well above its rising 200 day EMA in a bull market, but closed below its 20 day EMA for the first time in two months. The long-term technical structure of the index remains bullish. However, formation of back-to-back 'rounding top' patterns is a matter of concern for those holding long positions.
Daily technical indicators are looking bearish to neutral. MACD is falling below its signal line in bullish zone. ROC has dropped to its '0' line. RSI and Slow stochastic are seeking support from their respective 50% levels. Some more near-term index correction or consolidation may follow.
The stock market had expected a 25 bps (0.25%) interest rate cut by RBI on Dec 5. By maintaining status quo and downgrading full year GDP growth, RBI stated the obvious: monetary policy alone is not going to solve the growth problem. Instead of fiscal easing that could have boosted growth, there is talk about increasing GST tax rates, which will further burden consumers. Go figure!
Sensex may be in the process of forming a 'head and shoulders' reversal pattern, with a 'neckline' at 40000. The left 'shoulder' and 'head' have formed already - but the right 'shoulder' is yet to take shape. If the pattern does play out, the minimum downside target will be 38900.
Small investors would do well to sit on the sidelines and avoid value-buying in mid-cap and small-cap stocks.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty failed to close above its previous (Jun 7) top of 12103. That was just the excuse that bears needed to go on the attack. The index lost about 135 points (1.1%) on a weekly closing basis, but traded well above its three rising EMAs in a long-term bull market.
Note that the index has formed a bullish pattern of 'higher tops, higher bottoms' during the past two years - keeping alive the long-term bull market. However, after each of the three previous index tops - in Feb '18, Aug '18, Jun '19 - Nifty corrected 11-15%. A pattern repeat can drop the index below 10800.
Weekly technical indicators are showing bearish signs. MACD is above its rising signal line in bullish zone, but its upward momentum has stalled. ROC has crossed below its 10 week MA, and dropped down from its overbought zone. RSI is seeking support from the edge of its overbought zone. Slow stochastic is moving sideways with a downward bias inside its overbought zone. Some more index correction or consolidation is possible.
Nifty's TTM P/E has moved down to 27.78 - but remains well above its long-term average inside overbought zone. The breadth indicator NSE TRIN (not shown) is rising sharply inside its oversold zone, and may limit near-term index downside.
Bottomline? Sensex and Nifty charts are undergoing corrections after Touching Lifetime Highs. FIIs have started selling. Caution is advised due to the poor GDP number and a crisis of confidence among consumers.
According to ACMA, auto component sales during Apr-Sep '19 declined 10% YoY to Rs 1.79 Trillion. However, exports grew 3% to Rs 514 Billion, and after-market sales grew 4% to Rs 351 Billion.
As per a Dun & Bradstreet report, India's GDP growth is expected to remain subdued in the near future as the slowdown has deepened and is likely to remain extended for a longer period than previously anticipated.
BSE Sensex index Chart pattern
After touching lifetime intra-day and closing highs on Thu. Nov 28, the daily bar chart pattern of Sensex has been in a corrective mode. Profit booking often follows a new index top. Negative divergences visible on all four technical indicators - which failed to touch new tops - had also hinted at some consolidation or correction.
The index is trading well above its rising 200 day EMA in a bull market, but closed below its 20 day EMA for the first time in two months. The long-term technical structure of the index remains bullish. However, formation of back-to-back 'rounding top' patterns is a matter of concern for those holding long positions.
Daily technical indicators are looking bearish to neutral. MACD is falling below its signal line in bullish zone. ROC has dropped to its '0' line. RSI and Slow stochastic are seeking support from their respective 50% levels. Some more near-term index correction or consolidation may follow.
The stock market had expected a 25 bps (0.25%) interest rate cut by RBI on Dec 5. By maintaining status quo and downgrading full year GDP growth, RBI stated the obvious: monetary policy alone is not going to solve the growth problem. Instead of fiscal easing that could have boosted growth, there is talk about increasing GST tax rates, which will further burden consumers. Go figure!
Sensex may be in the process of forming a 'head and shoulders' reversal pattern, with a 'neckline' at 40000. The left 'shoulder' and 'head' have formed already - but the right 'shoulder' is yet to take shape. If the pattern does play out, the minimum downside target will be 38900.
Small investors would do well to sit on the sidelines and avoid value-buying in mid-cap and small-cap stocks.
NSE Nifty index chart pattern
The weekly bar chart pattern of Nifty failed to close above its previous (Jun 7) top of 12103. That was just the excuse that bears needed to go on the attack. The index lost about 135 points (1.1%) on a weekly closing basis, but traded well above its three rising EMAs in a long-term bull market.
Note that the index has formed a bullish pattern of 'higher tops, higher bottoms' during the past two years - keeping alive the long-term bull market. However, after each of the three previous index tops - in Feb '18, Aug '18, Jun '19 - Nifty corrected 11-15%. A pattern repeat can drop the index below 10800.
Weekly technical indicators are showing bearish signs. MACD is above its rising signal line in bullish zone, but its upward momentum has stalled. ROC has crossed below its 10 week MA, and dropped down from its overbought zone. RSI is seeking support from the edge of its overbought zone. Slow stochastic is moving sideways with a downward bias inside its overbought zone. Some more index correction or consolidation is possible.
Nifty's TTM P/E has moved down to 27.78 - but remains well above its long-term average inside overbought zone. The breadth indicator NSE TRIN (not shown) is rising sharply inside its oversold zone, and may limit near-term index downside.
Bottomline? Sensex and Nifty charts are undergoing corrections after Touching Lifetime Highs. FIIs have started selling. Caution is advised due to the poor GDP number and a crisis of confidence among consumers.
This post first appeared on Stock Market Charts | India Mutual Funds Investmen, please read the originial post: here
