On the technical front, analysts see hurdles for the index as it heads towards the 14,500 level. “The market remains overbought in the short term, and we maintain a cautiously bullish outlook unless Nifty breaks below 13,950 level,” said Nirali Shah, senior research analyst at Samco Securities.
“The official certification of Biden’s presidency by the US Congress and easing of the political unrest as Trump promised a smooth transition of power, have created an upbeat movement in the western market. The focus of Indian markets has shifted to third quarter earnings, forward ignoring high valuations,” 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 Monday’s action:
Wall St ends higher in renewed rally on hopes of further stimulus
Wall Street scaled new highs on Friday as hopes of more stimulus from Washington were shaken a bit by a senator’s comments but later bolstered after U.S. President-elect Joe Biden said his economic package will be in the trillions of dollars. The Dow Jones Industrial Average rose 0.18%, the S&P 500 gained 0.55% and the Nasdaq Composite added 1.03%.
European shares clock best week in nearly two months
European stocks logged their strongest weekly gains since November on Friday, with Germany’s DAX hitting a record high on the back of better-than-expected economic data and encouraging earnings updates from chipmakers. The pan-European STOXX 600 index rose 0.7% to bring gains for the first week of 2021 to 3%. Germany’s DAX index gained 0.6%, while UK’s FTSE 100 added just 0.2% to stand 6% higher on the week.
Tech View: Analysts cautiously optimistic as Nifty eyes 14,500
The index formed a bullish candle on the daily chart on Friday, following a ‘Bearish Belt Hold’ pattern on Thursday. Analysts said the 14,200 level, which was acting as a key hurdle until now, will be the immediate support for the index, which seems to have set sights on the 14,500-14,600 zone now. Below that, the 13,950 level may continue to offer strong support to the index, they said.
Check out the candlestick formations in the latest trading sessions
F&O: Nifty eyeing 14,500 mark
India VIX rose marginally by 0.10% from 20.62 to 20.64 level. Volatility needs to cool down below 20 zone to support the bullish market setup and fuel the next rally with a higher market base. On the options front, maximum Put Open Interest stood at 13,000 level followed by 14,000, while maximum Call OI was seen at 14,000 followed by 14,500 levels. There was minor Call writing at 14,400 and then 14,700 levels while Put writing was seen at strike price 14,200 and 14,300 levels. Options data suggested a wider trading range between 14,000 and 14,600 levels, while the immediate trading range was seen between 14,100 and 14,500 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Tata Motors, Jammu & Kashmir Bank, Vikas Multicorp, Adani Power, SPIC, Apollo Tyres, Equitas Holdings, REC, SJVN, L&T, Maruti Suzuki India, Deepak Fertilisers, Ujjivan Financial, among others.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Canara Bank, MTNL, Adani Green Energy, JTEKT India, Sakuma Exports, Bajaj Consumer Care, GSS Infotech, BSE, BEML, OnMobile Global, Eveready Industries, Tata Communications, Man Industries, Narayana Hrudayalaya, Orient Refractories, NACL Industries, Mahindra Holidays, ADF Foods, Bhageria Industries, Royal Orchid Hotels, Thangamayil Jewellers, Goldstone Tech, Clariant Chemicals, Ponni Sugars (Erode), DIC India and Sintercom India.
Friday’s most active stocks
RIL (Rs 2,444.17 crore), Maruti Suzuki (Rs 2,020.27 crore), TCS (Rs 1,823.07 crore), Wipro (Rs 1,736.27 crore), Infosys (Rs 1,711.67 crore), Bajaj Finance (Rs 1,527.36 crore), Tata Steel (Rs 1,384.48 crore), HDFC (Rs 1,190.35 crore), ICICI Bank (Rs 1,186.87 crore) and ITC (Rs 1,143.95 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: 29.08 crore), YES Bank (Shares traded: 18.38 crore), Rail Vikas Nigam (Shares traded: 11.96 crore), Suzlon Energy (Shares traded: 8.51 crore), RattanIndia Power (Shares traded: 8.47 crore), Trident (Shares traded: 8.37 crore), PNB (Shares traded: 8.07 crore), IDFC First Bank (Shares traded: 7.43 crore), BHEL (Shares traded: 6.84 crore) and GTL Infra (Shares traded: 5.78 crore) were among the most traded stocks in the session.
Stocks showing buying interest
IndiabullsVentures (PP), Rail Vikas Nigam, Elgi Equipments, Fortis Health and Capri Global witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday, signalling bullish sentiment.
Stocks seeing selling pressure
Jump Networks, Keerti Knowledge and Skills 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 322 stocks on the BSE 500 index settled the day in green, while 172 settled the day in red.
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