Yes Bank- gauging FII confidence

Post Brexit, our main concern is that whether FII will shed their exposure in Indian markets. Yes Bank may give us some clue. Foreigners are holding 41.25% as per latest shareholding pattern on March' 2016. This is one among the highest foreign exposure in an individual stock. So, if we follow the price movement of Yes Bank, we may get an idea of what is going to happen. In a nutshell bullishness in Yes Bank will signal good health of the overall market and vice-versa.

According to charts, Yes Bank is moving in an easy identifiable upward channel. It is amazing to notice such a strong upward movement bordered by two imaginary parallel lines.Current value of lower end of the channel is 1075. Stay and close below 1070 may signal weakness but not necessarily downtrend. Break below 1035 will be bearish for Yes Bank with an important level of 1060 in between.. As per our earlier discussions, the overall market may turn bearish. Obviously, there are levels for Nifty and Bank Nifty to watch, but wee need to be cautious in the mentioned scenario.

On the other hand as long as Yes Bank keeps maintaining above 1035, we may conclude that FII confidence in India remains positive.

       

Disclaimer - The views here expressed and the charts shared are strictly for educational purpose and not guideline for buy or sell. The author will not be responsible for any loss, that may occur.  

Infosys.....downward journey

Infosys now has 8.36 weightage in Nifty, which is highest among Nifty stocks. The stock possesses beta value of 0.83. Thus movement of Infosys have substantial contribution to Nifty.

The stock has formed a bearish head and shoulder with neckline around 1180. It has satisfied the volume consideration during the pattern.The stock yesterday closed at 1169, almost 1% below the neckline. Unless Infosys trades and closes above 1180, the stock may come down to the head and shoulder target of 1185.

Needless to say that the stock is in a short term downtrend with last top around 1215. Crossover and stay above this level will turn short term trend positive. 200 EMA is at 1150, that is a level to watch.

Please take a look at the chart. It has formed a classical bearish head and shoulder pattern.

Disclaimer - The views here expressed and the charts shared are strictly for educational purpose and not guideline for buy or sell. The author will not be responsible for any loss, that may occur. 

Life after Brexit....We are at make or break level

Three days after Brexit, we take a look at major European indices like DAX of Germany and CAC of France. We are focusing on these two indices because currently these two countries are most strong and influential in existing European Union. Suppose, if these two countries choose to exit, then the Global Economy will enter in a recession.

We are trying to develop a long term-view. Monthly chart has been taken into account. Both the indices are in verge of breakdown. If that happens, there could be panic in these markets.

Dow Jones of USA is not that bad at this point of time. Daily chart reveals that the index is about to complete a distribution formation. Break below the crucial level may trigger substantial correction.

Indian market is a bright exception. This is well reflected in the table given below.

Country	Index	Closing on 29/06/2016	200 EMA	Difference
Germany	DAX	9268	10190	- 9.0%
France	CAC	3984	4515	-11.8%
Britain	FTSE	5982	6250	-4.3 %
USA	Dow Jones	17162	17410	-1.4%
India	Nifty	8094	7910	2.3%

*** data taken from www.investing.com

Among these five major countries, only Indian index is trading above 200 EMA. We choose to compare current price with 200 EMA, which is considered as a long term health pointer.

Will Indian market continue to outperform as opined by most of the Indian fund managers and analysts. We cease to comment on this Indian growth story intact theme. all we want to say is that sentiment, especially weak sentiment,  is greatest driving force on stock market.

Nobody knows how the global economy will shape up post Brexit. It is uncertain. Stock market, as a matter of fact, fears uncertainty. You are free to take positive view on Indian stock market but please be aware of the fact that Indian stock market cannot move in isolation with the major developed economies of the world. Hope for the best and prepare for the worst is the motto in stock market as well as every aspects of life.

In a nutshell, we believe that Nifty may come down to 7500-7700 level initially as long as 8300 remains unconquered.  

Now let us look at the charts. All the charts are in make or break mode.

Things are not looking good for DAX....Make or break

CAC exhibiting same formation as DAX...here also Make or break scenario

Our own market is looking lot better than global counterpart. Is this weakness beginning of an end.

Disclaimer - The views here expressed and the charts shared are strictly for educational purpose and not a guideline for buy or sell. The author will not be responsible for any loss, that may occur.