FIIs were net sellers of equity worth Rs 23.4 Billion during the first three days of trading this week. Bulk of their selling occurred today after Nifty touched a new lifetime high of 10494.
DIIs were net buyers of equity worth Rs 15.8 Billion, as per provisional figures. Nifty gained 111 points (1.1%).
Statistics from FICCI's quarterly survey suggests slightly less optimistic outlook for the manufacturing sector during Q3 (Oct-Dec '17) due to Rupee appreciation impacting exports, issues with GST implementation and subdued demand.
Note the following comments in last week's update on the daily bar chart pattern of Nifty: "Nifty has been consolidating within the 'flag' for the past 5 weeks - after touching a lifetime high of 10490 on Nov 6. Since a 'flag' is usually a continuation pattern, the expected breakout is upwards."
The index closed at the upper edge of the 'flag' on Fri. Dec 15 after exit polls predicted comfortable BJP victories in recently concluded state elections in Gujarat and Himachal Pradesh.
As initial results started trickling in on Mon. Dec 18 and indicated a lead for Congress over BJP, panic selling ensued. The index collapsed below 10100 before recovering all its losses as the day progressed and BJP reclaimed its lead.
Nifty broke out above the 'flag' as expected - touching a high of 10444 before closing at 10389. The rally continued on Tue. Dec 19, but stalled today after touching a new high and then closing lower to form a 'reversal day' (higher high, lower close) bar.
That can trigger a pullback towards the top of the 'flag'. Also, the upward breakout on Mon. Dec 18 was not accompanied by a significant increase in volumes required to technically validate the breakout.
Daily technical indicators are in bullish zones. MACD is showing upward momentum, but failed to touch a new high with the index. RSI's upward momentum has stalled. Slow stochastic has entered its overbought zone, and can also trigger a pullback towards the top of the 'flag'.
Nifty's TTM P/E has moved up to 26.75 - way higher than its long-term average. The breadth indicator NSE TRIN (not shown) has dropped like a stone to the edge of its overbought zone - and can trigger a correction.
The index is trading above its three rising EMAs in a bull market. Any dips can be used to add to existing holdings.
Some analysts have suggested that stock returns in 2018 may not be as spectacular as in 2017. They may be correct in their prognosis. With a less than runaway victory for the BJP in Gujarat, expect the FM to open the investment tap and present a more populist budget in Feb '18.
That may not be great for the fiscal deficit, but can provide just the push that India's stuttering economy needs to get back on the growth track.
DIIs were net buyers of equity worth Rs 15.8 Billion, as per provisional figures. Nifty gained 111 points (1.1%).
Statistics from FICCI's quarterly survey suggests slightly less optimistic outlook for the manufacturing sector during Q3 (Oct-Dec '17) due to Rupee appreciation impacting exports, issues with GST implementation and subdued demand.
Note the following comments in last week's update on the daily bar chart pattern of Nifty: "Nifty has been consolidating within the 'flag' for the past 5 weeks - after touching a lifetime high of 10490 on Nov 6. Since a 'flag' is usually a continuation pattern, the expected breakout is upwards."
The index closed at the upper edge of the 'flag' on Fri. Dec 15 after exit polls predicted comfortable BJP victories in recently concluded state elections in Gujarat and Himachal Pradesh.
As initial results started trickling in on Mon. Dec 18 and indicated a lead for Congress over BJP, panic selling ensued. The index collapsed below 10100 before recovering all its losses as the day progressed and BJP reclaimed its lead.
Nifty broke out above the 'flag' as expected - touching a high of 10444 before closing at 10389. The rally continued on Tue. Dec 19, but stalled today after touching a new high and then closing lower to form a 'reversal day' (higher high, lower close) bar.
That can trigger a pullback towards the top of the 'flag'. Also, the upward breakout on Mon. Dec 18 was not accompanied by a significant increase in volumes required to technically validate the breakout.
Daily technical indicators are in bullish zones. MACD is showing upward momentum, but failed to touch a new high with the index. RSI's upward momentum has stalled. Slow stochastic has entered its overbought zone, and can also trigger a pullback towards the top of the 'flag'.
Nifty's TTM P/E has moved up to 26.75 - way higher than its long-term average. The breadth indicator NSE TRIN (not shown) has dropped like a stone to the edge of its overbought zone - and can trigger a correction.
The index is trading above its three rising EMAs in a bull market. Any dips can be used to add to existing holdings.
Some analysts have suggested that stock returns in 2018 may not be as spectacular as in 2017. They may be correct in their prognosis. With a less than runaway victory for the BJP in Gujarat, expect the FM to open the investment tap and present a more populist budget in Feb '18.
That may not be great for the fiscal deficit, but can provide just the push that India's stuttering economy needs to get back on the growth track.
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