stock market analysis: Ahead of Market: 12 things that will decide stock action on Monday

MUMBAI: Nifty50 on Thursday formed an indecisive doji candle on the daily chart indicating likely consolidation for the index going ahe

Here’s how analysts read the market pulse:-

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas said The index Nifty50 crossed a swing high of 17,884 as well as a falling trendline from the previous swing high.

Mazhar Mohammad of said technical oscillators seem to be clueless, as Nifty50 continued its upsurge, even as they remained bearish with lower tops. “In the next trading session if the bulls manage to defend the low of 17840 levels then they will make an attempt to enter into uncharted territories by surpassing 17,947 levels with initial targets present in the zone of 18,100-200 levels,” he said.

That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:

US stocks close down
US stock indices ended lower Friday, but still booked weekly gains, with technology stocks under pressure as bond yields rose after a monthly report on the labor market came in much weaker than expected. However, the jobs report seems unlikely to delay Federal Reserve plans to announce a reduction of its bond purchases as the economy recovers from the pandemic. The Dow Jones Industrial Average fell 8.69 points, or less than 0.1%, to close at 34,746.25. The S&P 500 slipped 8.42 points, or 0.2%, to end at 4,391.34. The tech-heavy Nasdaq Composite Index lost 74.48 points, or 0.5%, to finish at 14,579.54.

European stocks end week lower
European stocks ended a volatile session lower on Friday as investors digested data showing slowing jobs growth in the United States, but they still marked their best week in two months as fears of soaring inflation were tempered. The pan-European STOXX 600 index, which had fallen as much as 0.5%, only briefly reversed the earlier losses after the data. The STOXX 600 rose 1% on the week as relief over a temporary lifting of the U.S. debt ceiling and as easing fears of an energy crunch calmed rallying oil and gas prices which had triggered inflation worries.

Tech View: Consolidation likely
Analysts suggested that the Nifty50 could be heading for a consolidation after lack of follow up buying at resistance levels around 17,940 points.

F&O: Decline in VIX offers buying opportunity
The continued decline in the volatility gauge India VIX is likely to provide comfort to the bulls. Options data showed that the Nifty50’s trading range was at 17,400 points to 18,200 points.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of IEX, Vakrangee, PC Jewellers, Reliance Capital and Apollo Tyres.

The MACD is known for signalling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Indus Towers, CESC, Power Finance Corp, REC, LT Foods, Can Fin Homes, JSW Energy and Balaji Telefilms. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
IRCTC (Rs 5977 crore), Tata Motors (Rs 3622 crore), RIL (Rs 1924 crore), IEX (Rs 1637 crore), Tata Steel (Rs 1430 crore), TCS (Rs 1158 crore), Mindtree (Rs 1018 crore), and MCX (Rs 896 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.

Most active stocks in volume terms
Vodafone Idea (Shares traded: 18.2 crore), Tata Motors (Shares traded: 9.4 crore), YES Bank (Shares traded: 8.3 crore), Bank of Baroda (Shares traded: 8.2 crore), PNB (Shares traded: 6.3 crore), and BHEL (Shares traded: 6 crore) were among the most traded stocks in the session.

Stocks showing buying interest: Chambal Fert, Nazara Tech, IEX, Dixon Tech and MCX India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Vikas Proppant and Quadpro ITeS witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on these counters.

Sentiment meter favours bears
Overall, the market breadth remained in favour of the bulls. As many as 256 stocks on the BSE500 index settled the day in the green, while 244 settled the day in the red.

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