Market Ahead: Ahead of Market: 12 things that will decide the stock market action on Monday
Here’s how analysts read the pulse of the market:
Mazhar Mohammad of Chartviewindia.in said that if Nifty50 does not break through Friday’s bearish spread area of 16,509 to 16,535, the market path will remain bearish. “If the bulls fail to defend the 16,376 level, the weakness will initially extend to the 16,200-16,162 area,” he said.
Sharekhan’s Gaurav Ratnaparkhi said 16,350 is a key short-term support to watch where the index can form a base for itself. “The overall structure shows that this is a short-term consolidation, which can take place around 16,350 to 16,700 in the next few sessions,” he said.
That said, here’s a look at what some of the key indicators suggest for Monday’s action:
US stocks rally as Fed nervousness subsides
Wall Street rallied to close sharply higher on Friday, ending a tumultuous week over allaying concerns about whether the US Federal Reserve could start tightening its accommodative monetary policy sooner than expected. The Dow Jones Industrial Average rose 225.96 points, or 0.65%, to 35,120.08, the S&P 500 gained 35.87 points, or 0.81%, to 4,441.67 and the Nasdaq Composite added 172.88 points, or 1.19%, to 14,714.66.
European stocks post worst week in 6 months
European stocks edged up on Friday as Marks & Spencer lifted retailers, but the benchmark STOXX 600 still marked its worst week since February on signs of slowing economic growth and increasing cases of COVID -19. The pan-European STOXX 600 index rose 0.3 percent, with the retail sector gaining 1.2 percent.
Technical view: Nifty bears reinforce grip
Nifty50’s follow-up selloff on Friday after a ‘Dark Cloud Cover’ reversal candle formed in the previous session suggests that bears are strengthening their grip on the market. On Friday, the NSE barometer opened a downward spread, canceling its higher-low formation after five sessions and closed to form a small bullish candle on the daily chart.
F&O: Sudden VIX surge is concerning
India VIX rose 8.64% from 12.90 to 14.01 levels. A sudden surge in volatility resulted in lower profit taking in the market. VIX is at its highest daily close of the last 39 trading days, indicating that some volatile indices could be seen in the market. The options data suggests a wider trading range between 16,200 and 16,700 levels, while an immediate trading range has been observed between 16,300 and 16,600 levels.
Stocks showing a bullish bias
The Moving Average Convergence Divergence (MACD) momentum indicator showed a bullish trade pattern on the counters of
, Asian Paints, Godrej Consumer Products, Hindustan Aeronautic, Accuracy Shipping, CreditAccess Grameen and VST Industries.
The MACD is known to signal trend reversals in the securities or indices being traded. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may experience an upward movement and vice versa.
Stocks signal weakness ahead
The MACD has shown bearish signs at the counters of Tata Steel, Kotak Mahindra Bank, Adani Enterprises,
, Usha Martin, Sun Pharma Advanced Research, Laurus Labs, Aarti Industries, JK Tire & Industries, Zensar Technologies, Escorts,, PVR, Indoco Remedies, Info Edge (India), DCM Shriram, RPG Life Sciences, Pokarna, Albert David, Rama Steel Tubes, Sanofi India, Touchwood Entertainment, Bigbloc Construction, Kalyani Investment and Khandwala Securities. A bearish cross on the MACD on these counters indicated that they have just started their descent.
Most active stocks in terms of value
Tata Steel (Rs 3,861.81 crore), CarTrade Tech (Rs 1,802.55 crore), HUL (Rs 1,488.19 crore), Bajaj Finance (Rs 1,435.50 crore), MindTree (Rs 1,366.00 crore), Asian Paints (Rs 1209.32 crore), Apollo Hospital (Rs 1119.92 crore), HDFC (Rs 1084.54 crore),
(Rs 1076.41 crore) and SBI (Rs 1049.90 crore) were among the most active stocks on Dalal Street in terms of value. Higher activity on a meter in terms of value can help identify meters with the highest turnover for the day.
Most active stocks in terms of volume
Vodafone Idea (Shares traded: 30.94 crore), YES Bank (Shares traded: 7.45 crore), SAIL (Shares traded: 6.66 crore), Zomato (Shares traded: 5.38 crore), IDFC First Bank ( Shares traded: 4.86 crore), JP Power (shares traded: 4.66 crore), Ujjivan SFB (shares traded: 4.44 crore), PNB (shares traded: 3.88 crore), Bank of Baroda ( shares traded: 3.71 crore) and Suzlon Energy (shares traded: 3.66 crore) were among the most traded stocks during the session.
Stocks showing buying interest
HUL, Britannia, MindTree, Fortis Healthcare and
India saw strong buying interest from market participants as they increased their new 52-week highs, signaling bullish sentiment.
Stocks see the pressure to sell
CarTrade Tech, Aurobindo Pharma, Biocon, Alembic Pharma and Hero MotoCorp were under strong selling pressure and hit their 52 week low, signaling bearish sentiment on these counters.
The sentiment counter favors bears
Overall, the breadth of the market has remained in favor of bears. Up to 70 stocks in the BSE500 index settled the day in the green, while 426 settled the day in the red.
Podcast: Will D-Street See More Pain?
National stock indices saw strong sales on Friday as investors suffered losses of Rs 2.75 lakh crore. Will D-Street investors see more pain in the coming days? Will Nifty slip below 16,400? What do the datasheets suggest?