Purely on the basis of charts, which I have shown, I expect Nifty to move up in channel as shown. On Monday, Nifty finished as a green candle with higher high and higher low than previous day's candle despite no good news from anywhere. So why did it climb after falling for few minute in the beginning? Frankly, I have no idea. But August Mutual fund data shows interesting pointers- Mutual fund industry received Rs. 9,152 Crs inflows for August which was 13% higher than previous month.The monthly SIP contribution was at 8230 Crs, marginally lower than previous month. This means some one-time big money came in August. Which means DIIs are flush with liquidity and they have to deploy it somewhere.( In MF industry, it is understood as incompetence if you have funds parked with you for longer time, meaning you are not able to spot good opportunities. So they have to invest and at the same time maintain good record of NAV. it's a tough task in falling market) This in turn also means then, on Monday DIIs must have outclassed FIIs since they are in selling mode! Lets see:
The provisional figures show that FIIs bought shares worth 2828 Crs and sold worth 3016 Crs ( Net Sale of only Rs.188 Crs). DIIs, on the other hand bought shares worth 3104 Crs and Sold worth 2418 Crs (Net buy of 686.5 Crs). Generally, FII Net Sale figures are above 1000 Crs. One can also see FII sale figures in absolute terms very low as compared to these figures on any other day.
So despite weak auto sales data announced on Monday by SIAM, I expect Nifty to go up this week due to good liquidity available with DIIs. It might go down tomorrow for first few hours.
But again, since the larger trend is negative due to demand slowdown, expected low nominal GDP growth, lack of understanding of grave ground reality among policy makers and few other factors, FIIs/ FPIs will keep pulling out money because now it will be difficult for them to justify higher valuations in such weak economic scenario. This is precisely the reason why FIIs are selling despite tax surcharge stands removed.
Therefore, after rising in the channel as shown it might experience some resistance in the range of 11075 to 11100. Then it may try to rise further till 11150. But in this range, between 11100 to 11150 ( parallelogram denoted by Supply area, SA) it will spend some time and then start falling again due to larger downtrend mentioned above
I am also posting trades in Nifty & Bank Nifty for tomorrow, 11th September.
The provisional figures show that FIIs bought shares worth 2828 Crs and sold worth 3016 Crs ( Net Sale of only Rs.188 Crs). DIIs, on the other hand bought shares worth 3104 Crs and Sold worth 2418 Crs (Net buy of 686.5 Crs). Generally, FII Net Sale figures are above 1000 Crs. One can also see FII sale figures in absolute terms very low as compared to these figures on any other day.
So despite weak auto sales data announced on Monday by SIAM, I expect Nifty to go up this week due to good liquidity available with DIIs. It might go down tomorrow for first few hours.
But again, since the larger trend is negative due to demand slowdown, expected low nominal GDP growth, lack of understanding of grave ground reality among policy makers and few other factors, FIIs/ FPIs will keep pulling out money because now it will be difficult for them to justify higher valuations in such weak economic scenario. This is precisely the reason why FIIs are selling despite tax surcharge stands removed.
Therefore, after rising in the channel as shown it might experience some resistance in the range of 11075 to 11100. Then it may try to rise further till 11150. But in this range, between 11100 to 11150 ( parallelogram denoted by Supply area, SA) it will spend some time and then start falling again due to larger downtrend mentioned above
I am also posting trades in Nifty & Bank Nifty for tomorrow, 11th September.