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

MUMBAI: Nifty50 on Thursday formed an indecisive candle on the daily chart, as the benchmark index closed near the 17,800 mark.

Here’s how analysts read the market pulse:

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas said With Thursday’s bounce the Nifty50 has once again tested the upper end of the pattern and formed distribution over there throughout the day. “Structurally, the consolidation over the last few sessions has taken form a triangular pattern,” he said.

Mazhar Mohammad of said that the index may be entering a phase of high volatility where behavior of the index will remain highly uncertain. “Weakness shall not be expected unless Nifty50 closes below 17,600 level,” he said.

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

Wall St rises as debt ceiling worries cool

U.S. stocks rose on Thursday after a temporary truce in the debt-ceiling standoff in Congress relieved concerns of a possible government debt default, while a dip in oil prices eased worries of higher inflation. At 9:46 a.m. ET, the Dow Jones Industrial Average was up 376.57 points, or 1.09 per cent, at 34,793.56, the S&P 500 was up 46.77 points, or 1.07 per cent, at 4,410.32 and the Nasdaq Composite was up 172.48 points, or 1.19 per cent, at 14,674.39.

European shares climb higher

Europe’s bourses rallied off 2-1/2-month lows as easing oil and gas prices offered relief after a shock 4 per cent drop in German industrial production, which highlighted the toxic “stagflation” risk of runaway inflation and moribund growth. The pan-European STOXX 600 index rose 1.25 per cent in broad-based buying to reverse weekly losses, with miners , utilities and carmakers all driving higher.

Tech View: Consolidation ahead!

Analysts said that the Nifty50 index is likely to experience consolidation going ahead with a negative bias even as it closed above its 5-day and 13-day moving average. The market is uncertain which way it wants to go. Directional movement is in a bullish mode and RSI is above 60, said Independent Analyst Manish Shah.

F&O: Sharp drop in VIX builds up hope

India VIX fell 6.78 per cent from 17.33 to 16.15 level. A decline in volatility has again triggered support-based buying in the broader market. Now VIX needs to cool down below the 15-14 zone to continue the smooth ride of the market.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Firstsource Solution, Titan, NOCIL, IndusInd Bank, Dhanlaxmi Bank and Jamna Aut. 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 Sterling and Wilson, SBI Life Insurance, Phillips Carbon, Morepen Labs, Taj GVK, Astra Microwave, Surya Roshni, UFO Moviez, Sheela Foam, Intellect Design, JB Chemicals, and Sharda Cropchem. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

Tata Motors (Rs 6001 crore), IRCTC (Rs 4000 crore), Titan (Rs 1958 crore), Tata Power (Rs 1321 crore), Maruti Suzuki (Rs 1230 crore), ONGC (Rs 976 crore), Piramal Enterprises (Rs 947 crore), Infosys (Rs 927 crore), Godrej Properties (Rs 927 crore) and HDFC Bank (Rs 911 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: 27 crore), Tata Motors (Shares traded: 16 crore), Trident (Shares traded: 16 crore), YES Bank (Shares traded: 15 crore), Tata Power (Shares traded: 7.3 crore), ONGC (Shares traded: 6 crore), Suzlon Energy (Shares traded: 5.6 crore), Ashok Leyland (Shares traded: 4.9 crore), PNB (Shares traded: 3.5 crore) and Motherson Sumi (Shares traded: 3 crore) were among the most traded stocks in the session.

Stocks seeing buying interest

Sobha, Sona BLW, Tata Motors, Titan and Relaxo Footwear 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 362 stocks on the BSE500 index settled the day in the green, while 138 settled the day in the red.

Podcast: What to expect from RBI MPC tomorrow?
Domestic equity markets were in the green on Thursday as global sentiments improved. The benchmark indices kicked off the festive season with a bang and buying in reality, consumer durables, auto and IT stocks pushed the indices higher. Strong updates from the domestic firms boosted morale. Investors would be keenly watching RBI’s MPC meet outcome and India Inc’s September quarter earnings. What should one expect from RBI’s monetary policy tomorrow?

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