Here’s how analysts read the market pulse:-
Independent Analyst Manish Shah said the index has a gap area in the 18,010-18,050 range and that a rising moving average is placed at 17,972. The four-day decline, he said, is more of a sentiment knock-off rather than a serious case of a top.
Mazhar Mohammad of Chartviewindia.in said the 4-day selloff has dragged Nifty50 towards its critical support of 21-day exponential moving average, whose value is placed at 17,950. “If weakness in Nifty50 gets extended, this is where the index may ideally find some support and attempt a pullback,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:
The Dow Jones industrial average registered a record closing high on Friday and major equity indexes posted a third straight week of gains while the US dollar slipped. On the day, MSCI’s broadest gauge of global shares was flat, and the S&P 500 and Nasdaq ended lower. Stocks came under pressure after Federal Reserve Chair Jerome Powell said the U.S. central bank was “on track” to begin reducing its purchases of assets.
European stocks rose on Friday on a surge in technology stocks, strong earnings from France’s L’Oreal and a broad boost to sentiment provided by a surprise interest payment from debt-ridden China Evergrande Group. The STOXX 600 added 0.5% to close at over six-week highs and logged its third consecutive week of gains, up 0.5%. The FTSE 100 closed up on Friday as it shrugged off some of the week’s negative sentiment with banks and energy names compensating for weaker tech stocks
Tech View: Nifty50 to find support at 18,050
Analysts said that the index formed higher-low formation on the weekly chart, which suggested that the overall strong trend remains. The support zone for the index is likely to be at 18,010-18,050 points seems to be holding and the four-day decline seems to be losing pace, analysts said. Nifty50 needs to push above 18,300-18,500 to confirm a bottom at 18,000.
F&O: Some weakness may creep in
Traders continued to sell the out-of-money call options of the Nifty50 index today suggesting that they do not see scope for a bounceback in the index this week. On the other hand, they bought out-of-money out options of the index till the 17,900 strike price indicating that the downside could extend to that level.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Himadri Specialty, Sterlite Tech, RBL Bank, and KEC International.
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 South Indian Bank, ITC, Hindalco, Tata Motors, TV18 Broadcast, Indian Hotels, Bandhan Bank, Power Grid, India Cements, Texmaco, Firstsource, and Titan. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
IEX (Rs 2612 crore), IRCTC (Rs 2570 crore), Tata Motors (Rs 2121 crore), Tata Power (Rs 1920 crore), RIL (Rs 1341 crore), Federal Bank (Rs 1297 crore), Kotak Bank (Rs 1286 crore), Infosys (Rs 1274 crore), HDFC (Rs 1269 crore) and SBI (Rs 1214 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
YES Bank (Shares traded: 33.2 crore), RVNL (Shares traded: 16.3 crore), Federal Bank (Shares traded: 12.9 crore), IRFC (Shares traded: 11.5 crore), PNB (Shares traded: 10.2 crore), Vodafone Idea (Shares traded: 9.7 crore), Tata Power (Shares traded: 8.6 crore), Bank of Baroda (Shares traded: 8.3 crore), IDFC First Bank (Shares traded: 5.2 crore) and BHEL (Shares traded: 4.5 crore) were among the most traded stocks in the session.
Stocks showing buying interest: 3i Infotech, IRB Infra, RVNL, RITES, Federal Bank and KEC International witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure
Biocon, Glenmark Life, Aditya Birla Sun Life AMC, and Stylam Ind 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 343 stocks on the BSE500 index settled the day in the green, while 157 settled the day in the red.