Manish Hathiramani, technical analyst at Deen Dayal Investments said, “If we get past 14,950, we can go ahead and achieve 15,300. On the flip side, if we break 14,450, we can drop further to 14,200. Until either side is not taken out, we will continue to trade sideways with lackluster volumes.”
“The pullback is also supported by a strong rally happening in global markets. The domestic market was awaiting the RBI policy with an expectation to maintain the status quo. Future commentary on growth and inflation will be highly viewed with an optimistic outlook,” said Vinod Nair, Head of Research at
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
US stocks tread water after record rally
Wall Street’s main indexes treaded water on Tuesday as investors stayed on the sidelines a day after the S&P 500 and the Dow closed at record highs on renewed recovery hopes. The Dow Jones Industrial Average was down 16.38 points, or 0.05%, at 33,510.81, the S&P 500 gained 3.40 points, or 0.08%, at 4,081.31. The Nasdaq Composite rose 14.35 points, or 0.10%, at 13,719.94.
Europe’s STOXX 600 hits record high
Europe’s benchmark equity index hit a record high on Tuesday, recovering all of its pandemic-driven losses as investors bet on a speedy global economic recovery, spurred by bumper stimulus spending and COVID-19 vaccination programmes. European traders returned from a long weekend to push the STOXX 600 up 0.73% to 435.36 points. It has climbed more than 60% from last year’s lows and surpassed its previous all-time high of 433.90 points in February 2020.
Tech View: Nifty forms Inside Bar pattern
After a rangebound session, Nifty50 managed to eke out gains and formed an Inside Bar pattern. It is a two-day price pattern that occurs when the second day’s movement has a range that is completely inside the first day’s price range. “Nifty’s short-term trend remains rangebound. The market is witnessing an alternating ups and downs movement over the past four sessions. The current setup shows one may expect Nifty to retest the crucial overhead resistance around 14,880 level in the short term, before seeing another round of weakness from the highs,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Check out the candlestick formations in the latest trading sessions
F&O: VIX falls to 20.84 levels
India VIX fell 1.79% from 21.21 to 20.84 levels. Volatility has to cool down below 20 level to trigger some buying interest in the market. On the options front, maximum Put Open Interest was seen at strike price 14,000 followed by 14,500 while maximum Call OI stood at 15,000 followed by 16,000 levels. There was Call writing at 15,100 and then 14,800 levels, while Put writing was seen at 13,500 with a significant unwinding at 15,000 level. Options data suggested a wider trading range between 14,400 and 15,100 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of Adani Ports & SEZ, National Aluminium Company, BEL, Hindalco Industries, India Cements, Sobha, Manappuram Finance, Petronet LNG, CG Power and Industrial Solutions, Hindustan Zinc, HDFC Life Insurance, Wockhardt, Advanced Enzyme Tech, Bajaj Electricals, P&G Health, Rane Brake Lining, Sundaram Clayton and Wendt India.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of ITC, Praj Industries, Welspun India, Can Fin Homes, Kothari Sugar, Eris Lifesciences, Blue Dart Express, ICRA, Mohit Industries and Welspun Investments.
Tuesday’s most active stocks
Adani Ports SEZ (Rs 5166.64 crore), Adani Enterprises (Rs 2587.40 crore), Tata Motors (Rs 1949.42 crore), Tata Steel (Rs 1805.81 crore), SBI (Rs 1558.81 crore), JSW Steel (Rs 1413.11 crore), ICICI Bank (Rs 1325.74 crore), RIL (Rs 1283.32 crore), SAIL (Rs 1229.42 crore) and HDFC Bank (Rs 1088.81 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.
Tuesday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 20.06 crore), SAIL (Shares traded: 13.43 crore), PNB (Shares traded: 9.43 crore), Adani Ports SEZ (Shares traded: 6.46 crore), Tata Motors (Shares traded: 6.30 crore), YES Bank (Shares traded: 5.98 crore), Tata Power (Shares traded: 5.67 crore), SBI (Shares traded: 4.41 crore), JP Power (Shares traded: 4.20 crore) and IDFC First Bank (Shares traded: 3.92 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Graphite India, SRF, Adani Enterprises, Adani Ports & SEZ, CDSL, Infosys, Jindal Steel & Power, Likhitha Infrastructure, NRB Industrial Bearings, Tata Chemicals, Tata Steel, Vedanta and Neuland Laboratories witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.
Stocks seeing selling pressure
Suvidhaa Infoserve, AKG Exim, LCC Infotech, Ortin Laboratories and Radha Madhav Corporation witnessed strong selling pressure in Tuesday’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 286 stocks on the BSE 500 index settled the day in green, while 209 settled the day in red.
Podcast: Can Q4 earnings act as next catalyst for market rally? >>>
After the sell-off on Monday, the benchmark indices took a breather today to end the session barely in the green. The day’s trade was volatile with indecisiveness among traders as they balanced positive global cues with a record number of Covid infections at home. We spoke to Narendra Solanki of Anand Rathi Financial Services to share his views on the market.