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

MUMBAI: Nifty50 on Friday formed another bearish candle on the daily chart as the benchmark index closed lower for the third successive session. Analysts, however, see support for the index at 17,400-17,300 points.

Here’s how analysts read the market pulse:

Gaurav Ratnaparkhi of Sharekhan said that the overall structure shows that the medium-term trend continues to be positive. However, the index can stay in a short-term consolidation zone over the next few sessions.

Mazhar Mohammad of Chartviewindia.in said Nifty50 appears to have unfolded a fresh leg of downswing as breakdowns on short-term charts are clearly visible. “In recent corrections, Nifty50 found support from its 13-day simple moving average which was decisively broken down after Friday’s price action,” he said.

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

US shares
Benchmark equity indices in the US ended higher on Friday to kickstart to the new quarter as investors showed some appetite for riskier bets. US indices had ended September with losses weighed down by concerns over rising bond yields and slowing global growth.

European shares
The pan-European Euro STOXX 600 index closed lower by 0.4 per cent on Friday. The index recouped the majority of its losses from earlier in the session aided by travel and leisure stocks rising sharply. Mining stocks ended lower over weak China data.

Tech View: Stay neutral on long bets
The Nifty50 index formed lower high-low formation on the daily charts for the third straight session and analysts believe traders should remain neutral on any long-positions in the market and could look at taking short positions if the Nifty50 falls below 17,450.

F&O: Nifty50 looks indecisive
Maximum Put OI was seen at 17,000 level followed by 17, 500 while maximum Call OI stood at 18,000 level followed by 18,500. Options data suggested a broader trading range between 17,000 and 18,200 levels while the immediate trading range was seen between 17,350 and 17,850 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of CESC, UCO Bank, Trent, Dishman Carbogen, Vinyl Chemicals and J&K Bank.

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 IDFC First Bank, Dish TV India, IndusInd Bank, Just Dial, Hindustan Oil Exploration, KPIT Tech, Hero MotoCorp, Mahindra Holidays, Tata Communication, Ceat, Ashiana Housing, and Force Motors. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Tata Power (Rs 1454 crore), Delta Corp (Rs 1393 crore), Tata Steel (Rs 1170 crore), Zee Entertainment (Rs 1088 crore), RIL (Rs 1042 crore), Bharti Airtel (Rs 1010 crore), Tata Motors (Rs 990 crore), Infosys (Rs 957 crore), HDFC Bank (Rs 878 crore) and Cummins India (Rs 832 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: 37.17 crore), YES Bank (Shares traded: 19.9 crore), GMR Infra (Shares traded: 11.6 crore), PNB (Shares traded: 9.8 crore), Tata Power (Shares traded: 9 crore), IDBI Bank (Shares traded: 7.4 crore), BHEL (Shares traded: 7.35 crore), Trident (Shares traded: 5.7 crore), SAIL (Shares traded: 5 crore) and Delta Corp (Shares traded: 4.97 crore) were among the most traded stocks in the session.

Stocks showing buying interest
IDBI Bank, Abbott India, GMR Infra, Delta Corp and Allcargo Logistics witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
BKM Industries, Opto Circuits and Metalyst Forgings 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 242 stocks on the BSE500 index settled the day in the green, while 258 settled the day in the red.

Podcast: Will power & energy stocks shine this week?

While benchmark indices Sensex and Nifty disappointed investors last week, power and energy stocks got all the love and affection. BSE Power index and Nifty Energy index shot up by around 6 per cent each. Stocks like NTPC rallied over 12 per cent, Coal India 14 per cent, Tata Power 18 per cent and JSW Energy 10 per cent. In today’s special podcast with independent market expert Rajiv Nagpal, we try to figure out what sparked the rally in power and energy stocks and whether you should join the party.

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