NEW DELHI: Nifty made a strong rebound on Monday in line with strong global cues and a ‘no-harm’ budget. The 50-pack index formed a long bullish candle and recovered half the losses it sustained in the past six sessions.
Ruchit Jain, Senior Analyst – Technical and Derivatives at Angel Broking said, “One should prefer to trade with the trend now until any negative signs are seen and look for opportunities that could continue to outperform. The near-term trading range could be wide given the recent volatility, wherein the supports are now placed around 14,140 and 14,000, whereas resistance could be seen around 14,500.”
“The Union Budget 2021 is a boon for the equity market with all the essential aspects of growth supported by an increase in government spending without an increase in indirect taxes. Proposal for the privatisation of two PSU banks and measures to curb the impact of NPAs helped the banking index to lead the soaring rally. Higher government spending in infrastructure and increased FDI limit in insurance improved the overall outlook of these sectors,” 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 Tuesday’s action:
US stocks gain as retail investors move to silver
Wall Street’s main indexes gained on Monday following a steep sell-off last week, as a shift in the retail trading frenzy to silver drove up mining stocks and investors awaited manufacturing data later in the day. The Dow Jones Industrial Average rose 225.1 points, or 0.75%, to 30,207.75. The S&P 500 rose 37.9 points, or 1.00%, to 3,751.48, while the Nasdaq Composite rose 187.5 points, or 1.43%, to 13,257.7.
Miners lift European shares
European shares jumped on Monday, bouncing from their worst weekly decline since October powered by a rise in shares of miners after an ongoing retail frenzy shifted its attention to silver. The pan-European STOXX 600 index rose 1.14%, with shares of miners including Fresnillo, Polymetal International and Boliden AB jumping between 5% and 20%.
Tech View: Nifty forms Long White candle
Nifty50 reclaimed the 14,200 level in style on Monday, and formed a Long White candle on the daily chart to the surprise of many. The sharp gains made analysts believe that the NSE benchmark found a bottom at its recent low at 13,596 level. They said profit booking cannot be ruled out after Monday’s rise, but any fall could trigger buying. “Technically, Nifty has created a strong bullish reversal pattern on the daily chart and is moving towards the 14,500 mark. Traders should consider reducing the weak positions on the resistance or around the cost price. The strategy should be to buy if Nifty corrects to 14,200 level. The index would move past the 15,300 level if it crosses the 14,800 mark,” said Shrikant Chouhan of Kotak Securities.
Check out the candlestick formations in the latest trading sessions
F&O: VIX declines 8%
India VIX fell 7.96 per cent from 25.34 to 23.32 levels. After the Budget, volatility dropped from highs. It now needs to hold below 20 level to attempt a new lifetime high. On the options front, maximum Put Open Interest stood at 13,000 level followed by 13,500, while maximum Call OI was seen at strike prices 15,000 and 14,500. Options data suggested a wider trading range between 13,800 and 14,700 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Monday showed bullish trade setup on the counters of IDBI Bank, ICICI Bank, PNC Infratech, Container Corporation of India, KNR Constructions, Bajaj Finserv, Sanco Industries, Schneider Electric, Colgate Palmolive, Jyothy Labs, Avanti Feeds, DB Corp, Birla Corporation, Bombay Rayon Fashion, LG Balakrishnan & Bros, SML Isuzu, ADF Foods, Sundaram Fasteners, Polyplex Corporation, Satin Creditcare, Vidhi Specialty Food, Dynemic Products, HIL, Indostar Capital Finance, M M Forgings, Lakshmi Machines, Allsec Technologies and Prataap Snacks.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of UPL, Tata Motors, Havells India, Crompton Greaves Consumer Electricals, Apcotex Industries, Mahindra Logistics, Neuland Laboratories, Blue Dart Express, Technocraft Industries, TeamLease Services and Gujarat Apollo Industries.
Monday’s most active stocks
Tata Motors (Rs 4465.91 crore), ICICI Bank (Rs 4025.46 crore), IndusInd Bank (Rs 3547.69 crore), SBI (Rs 3108.52 crore), RIL (Rs 2956.17 crore), Bajaj Finance (Rs 2103.43 crore), Axis Bank (Rs 2102.81 crore), HDFC Bank (Rs 1897.91 crore), HDFC (Rs 1774.78 crore) and Larsen & Toubro (Rs 1590.55 crore) were among the most active stocks on Dalal Street on Monday in value terms.
Monday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 27.70 crore), PNB (Shares traded: 20.01 crore), YES Bank (Shares traded: 18.66 crore), SAIL (Shares traded: 17.77 crore), Tata Motors (Shares traded: 16.57 crore), SBI (Shares traded: 10.34 crore), IDFC First Bank (Shares traded: 9.13 crore), Bank of Baroda (Shares traded: 8.84 crore), IDBI Bank (Shares traded: 7.83 crore) and Indian Railway Finance Corporation (Shares traded: 7.20 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Sundaram Clayton, ICICI Bank, KNR Constructions, Tata Elxsi and Cummins India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Monday signalling bullish sentiment.
Stocks seeing selling pressure
Mrs. Bectors Food Specialities, Fairchem Organics, Jump Networks, Tirupati Forge and Valiant Organics witnessed strong selling pressure in Monday’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 399 stocks on the BSE 500 index settled the day in green, while 98 settled the day in red.
Podcast: 3 themes that look attractive after the Budget announcement >>>
A 5 per cent surge in a single day! That’s like a Dream Budget for Dalal Street. The biggest Budget Day rally for stocks on Monday came as the FM Nirmala Sitharaman ticked most boxes Dalal Street longed for. What made investors even happier was no hike in any of the equity-linked taxes. No introduction of Covid cess and announcement of bad bank also cheered investors. Sensex jumped 2,315 points for the day. Nifty50 topped 14,200. We caught up with Andrew Holland, CEO, Avendus Capital, to understand his views on the market.