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

NEW DELHI: Nifty50 on Thursday formed a bullish candle on the daily chart for the second straight session, indicating strength. Analysts said the index may top the crucial 17,700-17,900 levels in the coming days though some profit booking cannot be ruled out.

Here’s how analysts read the market pulse:

Shirkant Chouhan of Kotak Securities said that the index has formed a robust breakout continuation formation and the short-term trend is extremely strong. “The uptrend may continue up to 17,690-17,750,” he said.

Mazhar Mohammad of Chartviewindia.in said the price action of the last 19 sessions appears to have carved out some sort of ascending channel. “We believe the bulls can eventually head towards the upper boundary of the 19-day old ascending channel, whose value is placed at 17,900 level,” he said.

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

US benchmark indices fall

Wall Street indexes fell on Thursday as losses in heavyweight technology and oil stocks offset cheer over strong retail sales indicating economic resilience. The Dow Jones fell the least among its peers, as economically sensitive sectors such as financials and transport stocks were boosted by data showing retail sales unexpectedly rose in August. At 10:03 a.m. ET, the Dow Jones Industrial Average fell 131.39 points, or 0.38 per cent , to 34,683.00, the S&P 500 lost 23.10 points, or 0.52 per cent, to 4,457.60 and the Nasdaq Composite lost 91.39 points, or 0.60 per cent, to 15,070.13.

Travel stocks lift European shares

European stocks rose on Thursday as travel stocks snapped a four-day losing streak after Ryanair lifted its long-term traffic forecast, offsetting concerns about China’s slowing economy that dragged down miners. The pan-European STOXX 600 index climbed 0.4 per cent, bouncing off a six-week closing low hit in the previous session.

Tech View: Nifty eyes more gains

After breaking out of a consolidation range the previous day, Nifty50 scaled the 17,600-mark for the first time on Thursday. It was the second day when the index ended up forming a bullish candle on the daily chart, suggesting strength. Analysts said the index seems to be headed for 17,700-17,900 levels. They, however, did not rule out profit booking at highs.

F&O: India VIX needs to hold 13 level

India VIX moved up 1.10 per cent from 13.58 to 13.73 level. India VIX needs to hold below the 13-level to continue the bullish momentum. Options data suggested a broader trading range between 17,200 and 17,800 levels and the immediate trading range between 17,350 and 17,700 levels.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Tata Motors, Power Grid Corporation, Vedanta, Birlasoft, Gabriel India, Aarti Industries, Krebs Biochemicals, Brightcom Group, Minda Industries, Precision Wires, Cholamandalam Finance, Panama Petrochem, Avenue Supermarts, Oricon Enterprises, Tube Investments, Navneet Education, Maharashtra Seamless, Mangalam Cement, Dalmia Bharat Sugar, Prajay Engineers, IZMO, Suumaya Industries, Technocraft Industries, InfoBeans Tech, Steel City Securities, Indian Metals Ferro Alloys, Lakshmi Machines, HOV Services and NDR Auto Components.

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 Bharat Petroleum, Wipro, Ambuja Cements, United Spirits, JK Paper, Godrej Consumer Prod, JK Lakshmi Cement, FIEM Industries, Liberty Shoes, Trent, ACC, Dr. Lal Pathlabs, Century Textiles, Shilpa Medicare, Relaxo Footwears, Navin Fluorine, CreditAccess Grameen, Vardhman Acrylics, Bhagyanagar India, S P Apparels, Vardhman Textiles, Sasken Technologies, Accuracy Shipping, Ajmera Realty, Westlife Development, Career Point, Somi Conveyor Belting, Aurionpro Solutions, Repro India, Consolidated Finvest, Pioneer Distille, Krishana Phoschem and Vardhman Holdings. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

ITC (Rs 3421.44 crore), Bharti Airtel (Rs 3203.27 crore), IndusInd Bank (Rs 3099.57 crore), Vodafone Idea (Rs 2538.33 crore), SBI (Rs 1943.33 crore), RIL (Rs 1494.90 crore), IRCTC (Rs 1345.69 crore), YES Bank (Rs 1273.41 crore), Axis Bank (Rs 1234.87 crore) and TCS (Rs 1158.61 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 the highest trading turnovers in the day.

Most active stocks in volume terms

Vodafone Idea (Shares traded: 214.75 crore), YES Bank (Shares traded: 91.02 crore), PNB (Shares traded: 19.07 crore), ITC (Shares traded: 14.92 crore), IDFC First Bank (Shares traded: 8.66 crore), IDBI Bank (Shares traded: 8.64 crore), Bank of Baroda (Shares traded: 8.31 crore), South Indian Bank (Shares traded: 5.49 crore), Reliance Comm (Shares traded: 5.40 crore) and JP Power (Shares traded: 5.09 crore) were among the most traded stocks in the session.

Stocks showing buying interest

Easy Trip Planners, HLE Glasscoat, Clean Science & Technology, IndusInd Bank and Fairchem Speciality witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure

ABM International, Ganesh Benzoplast, International Conveyors, Krsnaa Diagnostics, Par Drugs And Chemicals and Shanti Overseas (India) witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bears

Overall, the market breadth remained in favour of bears. As many as 238 stocks on the BSE 500 index settled the day in green, while 260 settled the day in the red.

Podcast: what’s driving the current rally?
Domestic equity markets extended their gains on Monday, scaling new lifetime highs, thanks to the favourable policy decisions from the government. BSE Sensex added about 420 points to close at 59,150. It climbed Mount 59,000 for the very first time. Nifty50 gained 110 points to end the day at 17,630. The index settled just 15 points below its day’s high. What is driving this rally? What do the technical charts suggest about Nifty 50?

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