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

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

NEW DELHI: Nifty again touched its lifetime high, but shied away from breaching the crucial mark of 14,000 in today’s trade and formed a Dragonfly Doji formation for the day, signalling indecisiveness in the market. Nifty continued its winning streak for the sixth consecutive session, but the recent indecisive candles call for caution with the trade.

Rohit Singre, Senior Technical Analyst at LKP Securities said, “The index has reached its immediate and strong hurdle zone of 14,000-mark and if Nifty managed to hold above the 14,000-mark, then only we may see the current bullish momentum to extend further towards the 14,200 zone. Otherwise, some profit booking can be witnessed and the index is likely to trade in the range of 13,800-14,000 zone.

“Domestic sentiment is upbeat, expecting a nod for Oxford-AstraZeneca Covid vaccine usage in India. Growth sectors like auto, realty and metal led the rally, while defensives like pharma continued to remain under pressure. Although the market is at its most expensive valuation level, FPIs continue to pump in funds and roll the Indian market higher on a daily basis,” 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 Thursday’s action:
US stocks rise on hopes of vaccine-fueled recovery

US stocks rose on Wednesday, led by energy and material stocks, as investors bet on a strong economic recovery in 2021 on the back of COVID-19 vaccine rollouts and hopes of bigger fiscal support. At 09:40 a.m. ET, the Dow Jones Industrial Average rose 115.80 points, or 0.39% , to 30,451.42, the S&P 500 gained 13.47 points, or 0.36 %, to 3,740.51 and the Nasdaq Composite gained 45.05 points, or 0.35 %, to 12,894.02.

European shares rise as AstraZeneca gains

European stocks inched higher on Wednesday as UK’s approval of AstraZeneca’s COVID-19 vaccine, bets of more U.S. fiscal aid and large-scale vaccination efforts spurred hopes of a strong recovery in the global economy next year. The pan-European STOXX 600 was trading flat to hover near a 10-month high hit in the previous session.

Tech View: Nifty forms Dragonfly Doji
Nifty50 on Wednesday climbed for the sixth straight session. At one point, the 50-pack was just 3 points away from the 14,000 mark, but it settled a tad lower. The intraday selloff got bought into, as suggested by the indecisive candles on the daily charts in the past couple of sessions. On Wednesday, Nifty formed a Dragonfly Doji with a long lower wick, which suggested the same or similar open, high and closing prices for the index. “Despite trading in a positive zone, the indecisive price actions were accompanied by narrow trading range in last three sessions and overbought readings on the momentum oscillators. That said, the technical indicators are yet to generate sell signals,” said Mazhar Mohammad of Chartviewindia.in.

Check out the candlestick formations in the latest trading sessions


F&O: VIX needs to cool down below the 20-19 zone
India VIX moved up 1.54 per cent from 20.79 to 21.11 levels. Rising volatility needs to cool down below the 20-19 zone to support the bullish market setup with a higher market base. Marginal Call writing was seen at 14,100 and then 14,050 levels, while there was Put writing at 13,900 and then 13,850 levels. Options data suggested an immediate trading range between 13,800 and 14,100 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Wednesday showed bullish trade setup on the counters of Snowman Logistics, India Cements, Ambuja Cements, Indraprastha Gas, Gati, Spencer’s Retail, SPIC, Navkar Corporation, Dredging Corporation of India, Jamna Auto Industries, Aurobindo Pharma, Orient Cement, Cochin Shipyard, Eveready Industries, UltraTech Cement, NCL Industries, Mayur Uniquoters, OnMobile Global, AstraZeneca Pharma, Puravankara, EPL Ltd, Shree Pushkar Chemicals, Mangalam Cement, Natco Pharma, Zuari Agro Chemicals and DFM Foods.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Bharti Airtel, Sun Pharma, Biocon, Cadila Healthcare, NOCIL, Patel Integrated, Century Plyboards, Axiscades Technologies, KNR Constructions, Arvind SmartSpaces, Shree Rama Newsprint, Vipul Ltd, Dynacons Systems, AMJ Land Holdings, Consolidated Finvest, Renaissance Global, India Nippon Electricals and Bhagyanagar Properties.

Wednesday’s most active stocks
Bajaj Finance (Rs 2041.51 crore), RIL (Rs 2026.07 crore), HDFC Bank (Rs 1157.27 crore), ICICI Bank (Rs 1127.48 crore), IndusInd Bank (Rs 1034.06 crore), UPL (Rs 1018.77 crore), SBI (Rs 853.15 crore), Maruti Suzuki (Rs 777.18 crore), TCS (Rs 769.76 crore) and Tata Steel (Rs 729.16 crore) were among the most active stocks on Dalal Street on Wednesday in value terms.

Wednesday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 19.62 crore), GMR Infra (Shares traded: 14.61 crore), PNB (Shares traded: 9.26 crore), YES Bank (Shares traded: 7.91 crore), SAIL (Shares traded: 7.42 crore), BHEL (Shares traded: 5.53 crore), Canara Bank (Shares traded: 4.57 crore), Snowman Logistics (Shares traded: 4.35 crore), Tata Motors (Shares traded: 3.86 crore) and Bank of Baroda (Shares traded: 3.31 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Kansai Nerolac, SAIL, Wockhardt, Vaibhav Global and Astral Poly Tech witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Wednesday signalling bullish sentiment.

Stocks seeing selling pressure
Coastal Roadways, Blue Cloud Softech Solutions, Addi Industries, Indo-Global Enterprises witnessed strong selling pressure in Wednesday’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 265 stocks on the BSE 500 index settled the day in green, while 227 settled the day in red.

Podcast: Why is December such a good month for stocks? >>>
Benchmark equity indices Sensex and Nifty extended their gains for the sixth straight session on Wednesday, led by gains in Bajaj Finance, HDFC Bank, Kotak Mahindra Bank and UltraTech Cement. The 30-pack index traded in a range during the session, before hitting a record high of 47,807.85 in late trade. It eventually closed at 47,746, up 133 points. As the market hit another record high, a lot of investors are waiting on the sidelines for a healthy correction. Will they get one? We caught up with AK Prabhakar of IDBI Capital to know why there is a market frenzy of late.

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