Here’s how analysts read the market pulse:-
Shrikant Chouhan of Kotak Securities said the index has formed a double top on the intraday charts, indicating temporary weakness. “For the bulls, the 17,250 and 17,200 levels would be key support. Above the same, the uptrend is likely to continue up to 17,450-17,650 levels,” he said.
Mazhar Mohammad of Chartviewindia.in said Nifty50 may surpass 17,400 level if it sustains above 17,300 level. “If the index slips below 17,250 level, the weakness will resume with the initial target of 17,000 level,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:
US shares end lower
Wall Street ended sharply lower on Friday as investors weighed signs of higher inflation, while Apple Inc tumbled following an unfavorable court ruling related to its app store. The Dow Jones Industrial Average fell 0.78% to close at 34,607.72 points, while the S&P 500 lost 0.77% to 4,458.58. The Nasdaq Composite dropped 0.87% to 15,115.49.
European shares end ECB week lower
European stocks closed lower on Friday, down more than 1% this week as investors weighed risks from tighter monetary policies after the European Central Bank signalled a slowdown of pandemic-era bond purchases. The pan-European STOXX 600 index fell 0.3% and declined for four of five sessions this week as worries persisted about a slowing global economic recovery.
Tech View: Nifty may pull back towards short-term averages
Nifty50 on Thursday formed a small bullish candle on the daily scale and an indecisive Doji on the weekly scale, suggesting a pause in the ongoing trend. Analysts said the possibility of the NSE barometer reverting back to its short-term moving averages is good. They see support for the index in the 17,250-200 range and expect the 17,450 level to pose immediate resistance. For now, the weekly charts look strong.
F&O: VIX falls below 14 level
India VIX fell by 3.24% from 14.41 to 13.94 level. India VIX needs to hold below the 13 level to continue the bullish momentum. Options data suggested a broader trading range between 17,000 and 17,800 levels while the immediate trading range was seen between 17,200 and 17,500 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Confidence Petroleum, Mahindra CIE Auto, Edelweiss Financial Services, Tata Steel BSL, Jagsonpal Pharma, GNA Axles, Jindal Stainless, Brooks Laboratories, Surya Roshni, Star Paper Mills, Dynamatic Techno, Ramco Industries, IIFL Wealth Management, IIFL Securities, Pitti Engineering, Solar Industries, Privi Speciality Chem, Cambridge Technology, Borosil, TTK Prestige, RSWM, Compuage Infocom, Vishnu Chemicals, Kakatiya Cement Suga, Seya Industries, Eimco Elecon and Times Guaranty.
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 SBI Life Insurance, Vedanta, HDFC Bank, Brightcom Group, Divi’s Lab, Nelco, Shalby, Banco Products, Vinyl Chemicals, Kothari Petrochem, Lasa Supergenerics, Deccan Cements, Sasken Technologies, AksharChem (India), Rajdarshan Industries, Schaeffler India, Maharashtra Scooters and GRP. 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 1866.25 crore), Bharti Airtel (Rs 1319.48 crore), SBI Life (Rs 1191.14 crore), Indian Energy Exchange (Rs 1126.95 crore), Tata Motors (Rs 1022.19 crore), RIL (Rs 1002.80 crore), Tata Steel (Rs 765.64 crore), Kotak Bank (Rs 665.38 crore), HDFC Bank (Rs 646.80 crore) and Infosys (Rs 562.72 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: 43.24 crore), Dish TV India (Shares traded: 9.89 crore), YES Bank (Shares traded: 8.93 crore), Trident (Shares traded: 8.46 crore), UCO Bank (Shares traded: 5.07 crore), Future Consumer (Shares traded: 4.95 crore), Ashok Leyland (Shares traded: 3.92 crore), Suzlon Energy (Shares traded: 3.72 crore), Tata Motors (Shares traded: 3.40 crore) and NALCO (Shares traded: 2.85 crore) were among the most traded stocks in the session.
Stocks showing buying interest
KPR Mill, Carborundum Universal, Saregama India, JSW Energy and Adani Power witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
Glenmark Life Sciences and Nandani Creation witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, the market breadth remained in favour of the bulls. As many as 273 stocks on the BSE500 index settled the day in the green, while 222 settled the day in the red.
Podcast: Are we looking at a buy on dips market?
As the market trades near fresh highs, how should investors trade now? Should investors try to buy every dip? Where is the Nifty headed? What are the technical charts suggesting?