Chandan Taparia of Motilal Oswal Financial Services said the index has to continue to hold above 13,850 to witness a fresh rally towards 14,200 and 14,500 levels, while on the downside major support exists at 13,777 and 13,700 levels.
Mazhar Mohammad of Chartviewindia.in said if Nifty trades below 13,990 levels in the next trading session, then some intraday selling pressure may be witnessed with an initial target of 13,860 but a close below 13,850 may turn the tide in favour of bears for shorter term by ushering in a multi-day corrective downswing.
“Contrary to this sustaining above 14k levels rally shall get extended towards 14,200 kinds of levels. Despite this positivity, traders are advised to remain neutral on the long side of index, whereas intra-day traders can consider shorting below 13,990 for a modest target of around 13,880 levels,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:
Wall Street closes out wild pandemic year with Dow, S&P at records
US stocks ended a tumultuous year with the Dow and S&P 500 at records, as the three major U.S. equity indexes notched solid-to-spectacular yearly gains despite an economy upended by the COVID-19 virus as investors looked to a post-pandemic world. For the session, the Dow Jones Industrial Average rose or 0.65%, the S&P 500 gained 0.64%, and the Nasdaq Composite added 0.14%.
European stocks end 2020 down as tighter UK lockdowns weigh
European stocks closed lower on Thursday, ending 2020 in the red as tighter coronavirus restrictions in Britain and higher U.S. tariffs on some EU products dampened spirits on the final trading day of the year. The pan-European STOXX 600 index recorded a 3.7% drop in 2020 while the German DAX ended 2020 with a 3.5% gain. European markets were closed on Friday for New Year’s Day.
Tech view: Nifty50 takes out 14K, but narrow bodies suggest pause
The index formed a bullish candle on the daily and weekly charts. It has been forming higher highs and lows for the past seven sessions now. Analysts said the index can attempt to move towards 14,200 level and find firm support near the 13,800 level. “Nifty has been forming higher lows since last seven sessions. Now it has to hold above the 13,850 level to witness a fresh rally towards 14,200 level. Major supports stand at 13,777 and 13,700 levels,” said Chandan Taparia of Motilal Oswal Securities.
Check out the candlestick formations in the latest trading sessions
F&O: Higher lows for Nifty, cooling VIX support the bull case for Nifty
India VIX fell 7.30% from 21.09 to 19.56 levels. A cool-off in volatility below 20 level supports the bullish market setup and fuels the bulls with a higher market base. Since it is the beginning of new F&O series, options data lay scattered at different strike prices. Maximum Put open interest was seen at 13,000 level followed by 13,500, while maximum Call OI stood at 14,000 followed by 14,500. Options data suggested a wider trading range between 13,500 and 14,500 levels, while the immediate trading range was seen between 13,800 and 14,200.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of BHEL, Trident, Canara Bank, Jaiprakash Associates, Alok Industries, Rain Industries, SREI Infrastructure, Cholamandalam Investment, Sun Pharma, among others.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of ICICI Bank, Kellton Tech Solutions, Jindal Stainless, Rajesh Exports, Sutlej Textiles, Ramco Systems, SPL Industries, Plastiblends Industries and Revathi Equipment.
Friday’s most active stocks
Antony Waste Handling Cell (Rs 1,020.54 crore), RIL (Rs 918.30 crore), BEL (Rs 847.20 crore), PNB (Rs 781.24 crore), TCS (Rs 781.07 crore), Bajaj Finance (Rs 766.92 crore), ICICI Bank (Rs 719.71 crore), M&M (Rs 703.79 crore), SBI (Rs 682.48 crore) and Escorts (Rs 635.99 crore) were among the most active stocks on Dalal Street on Friday in value terms.
Friday’s most active stocks in volume terms
Vodafone Idea (shares traded: 42.35 crore) , PNB (shares traded: 22.74 crore) , YES Bank (shares traded: 14.57 crore) , BHEL (shares traded: 12.35 crore) , Trident (shares traded: 7.84 crore) , SAIL (shares traded: 6.98 crore) , BEL (shares traded: 6.72 crore) , Bank of Baroda (shares traded: 4.34 crore) , Canara Bank (shares traded: 3.30 crore) and NCC (shares traded: 2.79 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Trident, IndiaMART, India Cements, Chola Investment and CenturyPly witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday, signalling bullish sentiment.
Stocks seeing selling pressure
Kanpur Plastipack and Vishal Fabrics witnessed strong selling pressure in Friday’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 370 stocks on the BSE 500 index settled the day in green, while 127 settled the day in red.
Podcast: Will ‘ache din’ last for stock investors in 2021? >>>
By the very definition of it, the Santa Claus Rally should end in the first week of the New Year. Can the arrival of Covid vaccines and the coming earnings season make 2021 a ‘Happy New Year’ for stock investors? How long can these ‘ache din’ last? We find out this and more in today’s special podcast with independent market analyst Rajiv Nagpal.