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


MUMBAI: Nifty50 on Friday an indecisive candle on the daily chart suggesting that the index could be in for some consolidation in the coming session even as there is consensus among analysts that the overall bullish momentum will sustain.

Here’s how analysts read the market pulse:-

Kotak Securities’ Shrikant Chouhan said that the index has been making higher high-low formation on the daily chart, which is seen as broadly positive.

“The 17,775-17,700 range could offer immediate support. On the flip side, 18,000 and 18,200 levels could act as a major resistance level. A partial profit booking is advisable at 18,100-18,200 level,” Chouhan said.

Mazhar Mohammad of Chartviewindia.in suggested that the index could see a pause after strong up move recently. “A dip into the 17,750-700 can be a comfortable buying opportunity. If Nifty50 clears 17,950 level, a higher target towards 18,300 can be expected,” Mohammad said.

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

US shares
A volatile week ended on a tepid note for Wall Street on Friday with all three major indices ending close to the flatline. Lingering concerns over a default by China’s second largest real estate group Evergrande continued to keep risk appetite muted for US investors.

European shares
The Euro STOXX 600 index closed nearly 1 per cent lower on Friday as investors remained concerned over the evolving situation around Evergrande. European companies have significant exposure to the Chinese economy and with economists downgrading China’s growth outlook, investors were worried about the ramifications for the continent.

Tech View: Nifty headed for a pause
The Nifty50 index closed the week with 1.5 per cent gains despite concerns around Evergrande and the US Fed’s suggestion of a tapering of its bond buying program. Analysts suggested that traders could book partial profits around 18,100-18,200 points, whereas the index could find support at 17,800.

F&O: Buying in out-of-money calls
Call writing at the 18,000-strike price call option by traders ahead of the expiry of the September derivative series suggested that the level could act as a major resistance. However, put writing was seen at both 17,800 and 17,900 strike price, indicating rangebound movement in store for the index.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Tata Chemicals, Chembal Fertilizers, Infosys, KPIT Technology, Mahindra & Mahindra and PetronetLNG.

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 Bank of Baroda, CESC, Exide Industries, J&K Bank, Nocil, Sterling and Wilson, Zensar Technologies, Hindustan Oil Exploration, JK Tyre, Great Eastern Shipping, Narayana Hrudayalaya, Dr. Reddy’s, and Mindspace Business Parks. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Bharti Airtel (Rs 5257 crore), Zee Entertainment (Rs 2342 crore), Indus Towers (Rs 1800 crore), DLF (Rs 1789 crore), RIL (Rs 1745 crore), Tata Steel (Rs 1707 crore), HDFC Bank (Rs 1657 crore), Infosys (Rs 1467 crore), Oberoi Realty (Rs 1364 crore) and Godrej Properties (Rs 1236 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: 94 crore), Zee Entertainment (Shares traded: 7.3 crore), YES Bank (Shares traded: 7.1 crore), Bharti Airtel (Shares traded: 7.1 crore), Indus Towers (Shares traded: 5.8 crore), GMR Infra (Shares traded: 5.4 crore), BHEL (Shares traded: 5.3 crore), SAIL (Shares traded: 4.2 crore), ONGC (Shares traded: 3.4 crore) and PNB (Shares traded: 3.3 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Indus Towers, Chembal Fertilizers, Oberoi Realty, KPR Mills and KEI Industries witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

DU Digital Tech, CarTrade Tech and Inventure Growth 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 155 stocks on the BSE500 index settled the day in the green, while 345 settled the day in the red.

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