Ahead of Market: 12 things that will decide stock action on Monday

Ahead of Market: 12 things that will decide stock action on Monday

NEW DELHI: The Nifty 50 index staged a rebound on Friday after a hiccup in the previous session and formed a bullish candle on the daily chart with a long lower shadow.

“The rally in the domestic market was led by positive cues from global peers, strong buying in metal stocks and recovery in the banking sector. Metal stocks outshone other sectoral indices on reports of a possible price hike. PSU banks were also in focus today as the government announced capital infusion of Rs 14,500 crore in four PSU banks,” said Vinod Nair, Head of Research at Geojit Financial Services.

On the weekly scale, the headline index formed a large bullish candle for the truncated, three-session week gone by.

Chandan Taparia, Technical and Derivative Analyst at MOFSL, said, “Now, the Nifty has to hold above the 14,800 level to make a bounce towards 15,000 and 15,100 levels, while on the downside, support exists at 14,700 and 14,600 levels.”

That said here’s a look at what some of the key indicators are suggesting for Monday’s action:

US stocks

On Wall Street, the S&P 500 scaled 4,000 for the first time on Thursday and closed up 1.18 per cent at 4,019.87. With that, benchmark index took its gain from March 2020 lows to nearly 80 per cent. The Dow Jones Industrial Average climbed up 171.66 points or 0.52 per cent to end at 33,153.21, and the technology stocks-heavy Nasdaq Composite surged 233.23 points or 1.76 per cent to 13,480.10. The rally has been driven by unprecedented US stimulus measures and expectations that widespread vaccinations against COVID-19 will spur an economic rebound.

European shares

European equities moved higher on Thursday, as strong factory activity data out of the euro zone eclipsed concerns about another lockdown in France. The pan-European STOXX 600 index rose 0.61 per cent. The benchmark had finished the first quarter with a 7.7 per cent rise – its fourth straight quarter of gains. The German DAX climbed 0.66 per cent, while the UK’s FTSE 100 gained 0.35 per cent.

Tech View

Chandan Taparia of Motilal Oswal Securities said Thursday’s bullish candle was healthy. He said the index has formed higher lows in last two sessions and managed to hold above the 50-day exponential moving average (EMA). “The index needs to keep holding above 14,750 level to witness a bounce towards 15,000 and 15,100 levels. On the downside, support exists at 14,600 and 14,500 levels,” Taparia said.

Check out the candlestick formations in the latest trading sessions



Fear gauge India VIX fell 3.16 per cent from 20.64 to 19.98. The VIX needs to cool down below 20 for the bullish grip to continue and the market move to become smoother. On the options front, the maximum Put Open Interest was seen at 14,000, followed by 14,500, while the maximum Call OI was seen at 15,000, followed by 16,000. There was Call writing at strike prices 15,000 and 15,100, and Put writing at 14,500 and 14,200. Options data suggested a wider trading range between 14,500 and 15,200.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) on Thursday showed a bullish trade setup on the counters of JSW Energy, Firstsource Solution, UPL, Sun Pharma, India Cements, NHPC, MOIL, ICICI Prudential, Bharat Forge, Sun TV Network, Minda Corporation, AstraZeneca Pharma, L&T Technology Services, Bajaj Finserv, NCL Industries, Sundaram Fasteners, Cochin Shipyard, ABB Power Products and Sundaram Brake Lining.

Stocks signalling weakness ahead

The MACD showed bearish signs on Ajanta Pharma, Venus Remedies, Control Print, Ebixcash World Money, Lakshmi Finance and NK Industries.

Thursday’s most active stocks

Tata Steel (Rs 3,102.99 crore), HDFC Bank (Rs 2,647.47 crore), JSW Steel (Rs 1,777.38 crore), Adani Enterprises (Rs 1,375.62 crore), TCS (Rs 1,361.97 crore), Tata Motors (Rs 1,350.34 crore), SBI (Rs 1,170.34 crore), Bajaj Finance (Rs 1,119.96 crore), RIL (Rs 1,091.74 crore) and Adani Ports SEZ (Rs 1,089.76 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: 24.92 crore), PNB (10.00 crore), YES Bank (9.32 crore), SAIL (8.76 crore), JP Power (6.02 crore), BHEL (5.30 crore), IDFC First Bank (5.00 crore), Tata Motors (4.41 crore), Adani Power (4.35 crore) and NALCO (4.12 crore) were among the most traded stocks in the session.

Stocks showing buying interest

Atul Ltd, Ambuja Cements, Coforge, Cummins India, 3M India, Adani Gas, Happiest Minds, Adani Transmission, Graphite India and JSW Steel witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Thursday, signalling a bullish sentiment.

Stocks seeing selling pressure

Future Retail, Future Lifestyle Fashions, Future Supply Chain Solutions, Global Education, AKG Exim, Ortin Laboratories, Ravinder Heights, Suvidhaa Infoserve and Sanginita Chemical witnessed strong selling pressure in Thursday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment gauge favours bulls

Overall, market breadth remained in favour of bulls. As many as 392 stocks on the BSE 500 index settled the day in green, and 103 in the red.

Podcast: Will Sebi’s new spoofing rule protect retail traders?

In the last few days, market regulator Sebi has announced a series of enhanced measures relating to share delisting, listing of startups and certain disclosure norms. One of the most important changes that will impact retail traders the most is one related to checks on spoofing. To misguide other market participants, spoofers use algo trading to place bulk orders, but cancel them at the last moment in what is called spoofing in market parlance.

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