Here’s how analysts read the market pulse:
Sachin Gupta of Choice Broking said the index has made a U-turn after taking support from the Middle Bollinger Band on the daily chart. In the process, it has moved above the 21-day simple moving average.
“Moreover, on an hourly chart, Nifty50 has settled above the 50-hour moving average with a positive crossover in Stochastic & RSI, which supports the upward trend,” Gupta said.
Mazhar Mohammad of Chartviewindia.in said Nifty50 index entering record high territory is evidence that the overall bull trend is intact. “As the current leg of the rally can be attributed to some short covering and fresh impetus provided by the Federal Reserve traders are advised to take a cautiously optimistic stance based on their individual risk appetite,” Mohammad said.
That said, here’s a look at what some of the key indicators are suggesting for Tuesday’s action:
Wall Street extends rally
Economically sensitive stocks boosted Wall Street on Thursday as investors largely brushed off concerns over the Federal Reserve’s plans for tapering, while forecast raises from Accenture and Salesforce added to the positive mood. At 09:59 a.m. ET the Dow Jones Industrial Average rose 419.61 points, or 1.22 per cent, to 34,677.93, the S&P 500 gained 44.99 points, or 1.02 per cent, to 4,440.63, and the Nasdaq Composite gained 121.09 points, or 0.81 per cent, to 15,018.70.
London’s FTSE lags broader European market
The pan-European STOXX 600 index rose 1.03 per cent. The UK’s blue-chip FTSE-100 index was little changed on Thursday after, coming under pressure from a stronger pound after the Bank of England said the case for higher interest rates had strengthened.
Tech View: Nifty headed for 18K
The Nifty50 index saw a sharp rally on Thursday that helped it breeze past the resistance at 17,800 point. With the gap up opening, analysts see possibility of the index first taking out 17,900 points on Friday and 18,000 before the expiry of the September derivative series on September 30. Analysts said that the index will now find support at 17,650 points.
F&O: Buying in out-of-money calls
Today’s short-covering fuelled gains spurred traders to buy deep out-of-money Call options of the Nifty50 index expiring on September 30. The highest open interest among Nifty’s call options now stood at 18,000 and 18,500 strike price. On the other hand, the maximum put open interest was at 17,000 strike price followed by 17,500 strike price. Options data suggested a broader trading range between 17,500 and 18,000 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Indiabulls Real Estate, Indiabulls Housing Finance, United Spirits, Oberoi Realty, United Spirits and Aditya Birla Fashion.
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 Alok Industries, Dabur India, Titan Company, Colgate Palmolive India, Polycab India, Info Edge India, Shoppers Stop, Thermax, KPR MIlls, Godrej Agrovet, Intrasoft Tech, Valiant Organics, and Cigniti Tech. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
Zee Entertainment (Rs 4640 crore), DLF (Rs 3023 crore), Godrej Properties (Rs 2408 crore), Bharti Airtel (Rs 1898 crore), RIL (Rs 1799 crore), Tata Motors (Rs 1687 crore), Bajaj Finance (Rs 1669 crore), Tata Steel (Rs 1313 crore), Bajaj Finserv (Rs 1311 crore) and United Spirits (Rs 1238 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: 34.14 crore), Zee Entertainment (Shares traded: 13.81 crore), YES Bank (Shares traded: 7.9 crore), DLF (Shares traded: 7.6 crore), Tata Motors (Shares traded: 5.3 crore), GMR Infra (Shares traded: 4.5 crore), Tata Power (Shares traded: 4.3 crore), SAIL (Shares traded: 3.7 crore), Zomato (Shares traded: 3.2 crore) and Coal India (Shares traded: 3.1 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Welspun India, Oberoi Realty, Godrej Properties, DLF and Tata Motors DVR witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure
Suvidha Infoserve, Shanti Overseas and Shrem InvIT 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 348 stocks on the BSE500 index settled the day in the green, while 152 settled the day in the red.
Podcast: Which sectors look strong going ahead?
At close, Sensex was up 958 points. It was just 115 points away from the magical 60,000 mark. Nifty50 too cleared 17,800 hurdle in a style and looked poised for 18,000 level in coming days. A total of eight Sensex stocks such as RIL, TechM, L&T, Kotak Bank and NTPC hit fresh 52-week highs. With concerns easing over Fed taper and Evergrande crisis, will market see more gains ahead? Which sectors or themes can deliver strong returns going ahead?