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

MUMBAI: Nifty50 formed a bearish candle on the daily chart on Thursday and fell below its 20-day exponential moving average.

Here’s how analysts read the market pulse:

Gaurav Ratnaparkhi of Sharekhan said that during the day, Nifty50 breached a rising trendline on the hourly chart and went down to test its 40-day exponential moving average. “Selling was absorbed near the key short-term moving average and the index recovered to some extent thereon. The level of 17,800 indeed acted as crucial support & will continue to provide support going ahead,” he said.

Mazhar Mohammad of said Nifty50 is attracting the attention of dip buyers as intraday recoveries are being witnessed. Unless the index closes below the 17,800 levels, the bulls may still have an opportunity to make a comeback.

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

Wall Street rises after inflation-led rout

The S&P 500 and Nasdaq rebounded on Thursday from two days of the inflation-driven selloff, but losses in Walt Disney due to slowing subscriber growth in its streaming video service weighed on the Dow. At 9:53 a.m. ET, the Dow Jones Industrial Average was down 51.75 points, or 0.14 per cent, at 36,028.19, the S&P 500 was up 13.79 points, or 0.30 per cent, at 4,660.50 and the Nasdaq Composite was up 134.58 points, or 0.86 per cent, at 15,757.29.

European stocks rise amid inflation worries

European stocks were little changed on Thursday after concerns about the U.S. inflation spike offset some relief around property developer China Evergrande and a slew of corporate earnings. The pan-European STOXX 600 rose 0.37 per cent on Thursday after data on Wednesday showed U.S. consumer prices surged at the fastest pace since 1990, which could compel the Federal Reserve into faster policy tightening.

Tech View: Holding 17,800 a must for recovery

Analysts said that Nifty50 will have to hold above the 17,800 level else it may fall towards its 50-day moving exponential average placed at around 17,650 points. As long as the index trades above 17,800, it will make an attempt to move towards 18,000-18,100.

F&O: Sideways movement seen likely

In the derivatives segment, traders aggressively bought out-of-money put options of the Nifty50 index indicating that they expect further selling pressure in the market going ahead.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Subex, Shree Renuka Sugars, Welspun Corp, Manali Petrochem, and Adani Ports.

The MACD is known for signaling 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 Bank of Baroda, SAIL, Union Bank of India, SBI, and DLF. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

Tata Steel (Rs 1785 crore), FSN E-Commerce (Rs 1551 crore), Tata Motors (Rs 1488 crore), L&T (Rs 1384 crore), RIL (Rs 1263 crore), Tata Power (Rs 1203 crore), SBI (Rs 1148 crore), Zomato (Rs 1170 crore), Infosys (Rs 815 crore) and Adani Enterprises (Rs 749 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: 19.6 crore), YES Bank (Shares traded: 12.2 crore), Zomato (Shares traded: 8.4 crore), Bank of Baroda (Shares traded: 5.3 crore), Tata Power (Shares traded: 5.0 crore), BHEL (Shares traded: 3.96 crore), PNB (Shares traded: 3.6 crore), IDFC First Bank (Shares traded: 2.97 crore), and Tata Motors (Shares traded: 2.9 crore) were among the most traded stocks in the session.

Stocks showing buying interest

Timken India, Capri Global, Century Ply, Brightcom Group, Saregama India and Olectra Greentech witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

P&G Health, Aarti Drugs, and CarTrade Tech 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 bears. As many as 149 stocks on the BSE500 index settled the day in the green, while 351 settled the day in the red.

Podcast: How to approach market as inflation concerns rise?
Domestic equity markets continued their losing streak as benchmark indices dropped after Thursday’s trauma. Traders pushed the panic button after inflationary concerns, which led to sharp selloff. The weak global cues intensified the selling pressure. Investors got nervous over possible faster-than-expected tightening signals. Inflation in the US rose at the fastest clip in more than 30 years in October. Which pockets should investors look at amidst the rising inflation concerns?

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