ASI weekly report with a difference - 25.01.2019

Week ending 25.01.2019 saw the number of trades moving up to 23,534 against 16,386 of the previous week in the ASI. This is the highest for the Month. The market PE dropped to 9/39 over 9/57, and the PBV edged higher to 1/18 from 1/16. This was an indicator that despite the Trades increasing considerably the value in the Market has dropped. Another noticeable feature is that the Purchases made by Locals had dropped amidst heavy trading (from 2.8Bn to 958Mn). Sales by the Locals had decreased too (from 1.36Bn to 1.2Bn). As we are moving on to the Last week of the month this is not encouraging for the Traders. Foreign sales (1.5Bn this week, which was 2.1Bn last week) and purchases (617Mn of the last week improved to 1.4Bn during the week) took a positive turn. Higher number of Trades showed the bullish momentum by Traders. They were concentrating into one sector in particular and that is the Plantations. Traders who would want to be in the Plantation Sector need to make a note on the below mentioned key points as follows:

a). Sentiment effects that would bring due to wage hike.
b). Overbought levels in the Plantation Counters.
c). Month end de-liveraging that may happen.

We also can see that the number of counters that had over 100 trades during the week had increased from 29 to 49. Also the 300 trades and above counters were 18 from 10 counters of the previous week. Interestingly half of them came from one sector that is none other than the Plantation Sector.

JINS,BFN,CONN and DIAL moved out of the 300 club. That is one indication that those counters are now on a consolidation. KAPI is another that needs to see increased trades and volumes for a trend continuation, which will be covered below. HEXP performed well during the week, with volumes and trades, but will need a cooling off to move higher. LDEV is in a consolidation which is needed for a Trend Continuation. MGT needs to be collected at the present zone, as covered in the chart below. Sector chart of the Plantations is covered below which is an important chart to follow. It will be interesting to cover the counters in the plantations separately hence only the Sector chart is given here.

Let's look at the weekly charts of the ASI, PLT,LDEV,MGT and KAPI below:

ASI Weekly -

As mentioned above the Value of the Over all market has not improved during the week. ASI weekly in that back ground saw the bears trying to take control by bringing down the price line below the previous weeks low of 5962 to 5944, but was short lived. Bulls took the price line up quite decisively to close at 5978 after missing the 9EMA of 5996 by just 1 point. It will be a challenge for the bulls to defend their task during the week to follow as it will have face the month end selling. As long as 5944 which was the low of the week is defended the bulls can over power the bears and continue a trend into the new month.

Plantations Weekly -

We were expecting the price line of the PLT chart to test a resistance zone between 805 and 842 points. With a close at 820 the index has moved to the zone within a week. The 3 key points mentioned above will play a major role, thus a retracement before a Trend Continuation can not be ruled out.

KAPI Weekly -

As I have been saying for awhile now, trading KAPI is very easy if you watch the movement between 14/30 and 17/20. If 14/30 is broken down it will be short term bearish. !4/30 support and break out above 17/20 should happen within days for higher highs. Else the consolidation will panic many traders.

LDEV Weekly - 

Impulsive action that started at 6/40 and 4/80  could not hold as the trend failed on both occasions, however the impulse triggered at 4/00 survived to hold. The price is consolidating above that with a high of 4/70. If the said consolidation is to sustain above 4/00 with above average volumes, higher highs can be expected. Since the Price line is at the recent lower base levels, buying at the present levels between 4/40 and 4/60 will not be a bad idea, as long as you have a stop below 4/00.

MGT Weekly - 

With improved quarterly figures, attention increased towards MGT. Do not see a huge short term upsurge until a strong base is formed between 8/90 and 9/70, with heavy volume absorption. If not for volumes this counter will not see higher highs. Do not ignore this counter at all. If the present growth is a continuous process we could see above average returns.