Rohit Singre, senior technical analyst at LKP Securities said, “Index has formed a good base near 14,100-14,000 zone. Holding above said level, one can hold longs, but any break below 14,000 mark can result in more profit booking and we may see dip towards 13,800 zone. Strong hurdle for Nifty is formed near 14,250 zone and fresh upside is only possible above it.”
“Although the markets witnessed a rangebound rally during the day, profit booking was seen towards the end of the session. Outperformance was seen in small and mid-cap stocks today. Realty stocks experienced upward momentum after Maharashtra cut levies on projects by 50 per cent,” said Vinod Nair, Head of Research at Geojit Financial Services.
That said, here’s a look at what some of the key indicators are suggesting for Friday’s action:
US stocks gain as Democrats win Senate control
Wall Street’s main indexes gained on Thursday, with the S&P 500 and the Dow near record levels as bets on more pandemic aid under a Democrat-controlled US Congress eclipsed data showing elevated levels of unemployment claims. The Dow Jones Industrial Average rose 350.8 points, or 1.14%, to 31,179.60. The S&P 500 rose 58.6 points, or 1.55%, to 3,806.41, while the Nasdaq Composite rose 281.5 points, or 2.21%, to 13,022.45.
Commodity rally drives European shares higher
European stocks climbed for a second straight session on Thursday, as construction stocks gained on upbeat sales forecast from Saint Gobain and commodity-linked shares rose on hopes of larger U.S. stimulus after Democrats won Senate control. The pan-European STOXX 600 index advanced 0.5% to hold near February 2020 highs, while London’s blue-chip FTSE 100 gained 0.4% and Germany’s DAX index was up 0.3%.
Tech View: Nifty50 forms ‘Bearish Belt Hold’
Thursday marked the third straight session when Nifty50 breached the psychologically important 14,200 level on an intraday basis, but fell short of closing above it. A gap-up start to the session at 14,247 proved the day’s high, as the index ended the day forming a ‘Bearish Belt Hold’ candle on the daily chart. Such a pattern reflects selling at the word go and, following indecisive candles, it is seen as a negative formation. Analysts, however, say as long as the 13,950 level remains secured, chances of Nifty’s recovery are strong. For the day, the index closed at 14,137, down 8.90 points, or 0.06 per cent.
Check out the candlestick formations in the latest trading sessions
F&O: VIX needs to cool down below 20 level
India VIX slipped 1.83% from 21 to 20.61 level. Volatility needs to cool down below 20 level to support the bullish market setup and fuel the next rally with a higher market base. There was minor Call writing at 14,200 and then 14,500 levels, while there was Put writing at strike prices 13,900 and 13,500. Options data suggested a wider trading range between 13,700 and 14,500 levels, while the immediate trading range stood between 14,000 and 14,400 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Thursday showed bullish trade setup on the counters of IDFC, Bharti Airtel, Power Grid Corporation, GMR Infrastructure, Ujjivan Small Finance Bank, DLF, Bombay Dyeing, Bharat Forge, IndusInd Bank, Adani Ports & SEZ, Adani Enterprises, Aditya Birla Capital, PetronetLNG, United Spirits, Sun TV Network, Exide Industries, Marksans Pharma, Hindustan Petroleum, Piramal Enterprises, Fortis Healthcare, Central Depository Services (CDSL), Shriram EPC, Cummins India, The Ramco Cements, Castrol India, City Union Bank, Finolex Cables, Jubilant Foodworks, Kalpataru Power and Bata India.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Hindustan Unilever, Laurus Labs, ICICI Securities, Coromandel International, MBL Infrastructures, Syngene International, Goldiam International, Torrent Pharmaceuticals, Natco Pharma, Schneider Electric, EPL, Siyaram Silk, Sutlej Textiles, La Opala RG, Vivimed Labs, Caplin Point Lab, AstraZeneca Pharma, Capri Global Capital, DFM Foods, India Tourism Development Corporation, Bhagyanagar India, Axiscades Technologies, TD Power Systems, Page Industries and Prabhat Dairy.
Thursday’s most active stocks
RIL (Rs 2864.13 crore), Tata Steel (Rs 2749.39 crore), Bharti Airtel (Rs 2106.95 crore), Bajaj Finance (Rs 1542.07 crore), HDFC Bank (Rs 1414.86 crore), Infosys (Rs 1387.54 crore), Tata Motors (Rs 1307.35 crore), Axis Bank (Rs 1196.28 crore), Shriram Transport Finance (Rs 1159.12 crore) and ICICI Bank (Rs 1154.54 crore) were among the most active stocks on Dalal Street on Thursday in value terms.
Thursday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 35.21 crore), IDFC First Bank (Shares traded: 20.20 crore), GTL Infra (Shares traded: 15.99 crore), YES Bank (Shares traded: 15.76 crore), IDFC (Shares traded: 14.04 crore), RattanIndia Power (Shares traded: 11.28 crore), Trident (Shares traded: 11.12 crore), PNB (Shares traded: 9.49 crore), Tata Motors (Shares traded: 6.60 crore) and Ashok Leyland (Shares traded: 5.32 crore) were among the most traded stocks in the session.
Stocks showing buying interest
IDFC, Hindustan Zinc, IDFC First Bank, Tata Steel (PP) and Indiabulls Ventures witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Thursday signalling bullish sentiment.
Stocks seeing selling pressure
Jump Networks and Vishal Fabrics witnessed strong selling pressure in Thursday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 308 stocks on the BSE 500 index settled the day in green, while 189 settled the day in red.
Podcast: Midcap index @ record high. Will Q3 earnings justify optimism? >>>
Dalal Street bulls never looked confident as they pushed benchmark indices higher earlier on Thursday. The result? They surrendered completely in the later session. Sensex fell 465 points from day’s high to close at 48,093, down 81 points. Nifty50 settled at 14,137. Infosys and FMCG majors ITC and Hindustan Unilever weighed on indices. We caught up with G Chokalingam of Equinomics Research & Advisory to know about the prevailing valuations and the ongoing rally in the midcap stocks.