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


MUMBAI: Nifty50 on Friday formed a bearish candle on the daily chart as the benchmark closed lower again amid muted risk appetite among investors. For the day, the index closed at 17,671.65, down 185.60 points or 1.04 per cent.

Here’s how analysts read the market pulse:-

Rohit Singre, Senior Technical Analyst at LKP Securities, said the index has formed a bearish candle after forming a bearish piercing candle last week, hinting at weakness. “It has reached a good support zone of 17,600-17,500 from where we have in the past witnessed a good move towards 18,600 zone. If the mentioned range is held, one can again expect a recovery towards the 17,800-17,900 zone,” he said.

Mazhar Mohammad of Chartviewindia.in said Nifty50 has fallen by nearly 1,000 points in 8 sessions and hence, a pullback attempt can’t be ruled out, provided the index continues to defend its 50-day moving average.

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

US shares
The Nasdaq index hit a record high on Thursday, led by gains in mega-cap companies including Apple Inc and Amazon.com ahead of their earnings reports, while solid results from Caterpillar and Merck helped investors shrug off dismal GDP data.

European shares
European equities ended flat on Friday as a jump in major financial stocks driven by surging bond yields offset weakness in high dividend-yielding sectors and commodity companies reeling from a slide in oil and metal prices. The pan-European STOXX 600 index closed 0.1% higher. But it notched a gain of 4.6% in October, marking its best month in seven and recouping all of September’s losses as strong-third quarter earnings reports drew in investors.

Tech View: All eyes on 17,500
Analysts said that the Nifty50 index has reached a good support zone and if it stays above that zone of 17,500-17,600 points, it could stage a slight recovery. Having fallen nearly 1,000 points in eight sessions, analysts believe the index is due for a pull back soon.

F&O: Weak rollovers add to bearishness
The rollover of low positions to the November derivative series will continue to weigh on the sentiment in the market. Traders continued to buy out-of-money put options of the index till the 17,500 strike price suggesting that any selling will be limited to that level.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Ambuja Cements, Triveni Turbine, Biocon, InterGlobe, and Gujarat Gas.

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 PNB, RBL Bank, Tata Motors, SBI Cards, Karur Vysya Bank, Kotak Bank, L&T, Ircon, LT Foods, City Union Bank, and DCB Bank. 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 6655 crore), Tata Power (Rs 2433 crore), RIL (Rs 1674 crore), Axis Bank (Rs 1594 crore), SBI (Rs 1576 crore), Canara Bank (Rs 1518 crore), Tata Motors (Rs 1502 crore), TCS (Rs 1356 crore), ICICI Bank (Rs 1255 crore) and InterGlobe (Rs 1109 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: 22.8 crore), PNB (Shares traded: 14.8 crore), Tata Power (Shares traded: 11.5 crore), YES Bank (Shares traded: 10.5 crore), IRCTC (Shares traded: 8.3 crore), Bank of Baroda (Shares traded: 7.6 crore), BHEL (Shares traded: 7.5 crore), Canara Bank (Shares traded: 7.2 crore), SAIL (Shares traded: 4.8 crore) and NMDC (Shares traded: 3.9 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Canara Bank, Triveni Turbine, ABB India, United Spirits, Birla Corp and Asahi Glass witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
CarTrade, Bombay Burmah, Aarti Drugs, and Jubilant Food 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 210 stocks on the BSE500 index settled the day in the green, while 290 settled the day in the red.

Podcast: Are auto stocks worth being a part of your portfolio?
Auto companies are stuck in a peculiar situation. On one side, there is the tailwind of festive season demand, low interest rates and reopening of the economy, but on the other side bottlenecks related to supply are proving to be a dampener. In today’s special podcast with independent market expert Rajiv Nagpal, let’s understand whether it is worth risking your money in auto stocks at this stage.



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