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

MUMBAI: Nifty50 formed a bearish candle on the daily chart on Wednesday as the headline index failed to sustain the gains seen on Tuesday.

Here’s how analysts read the market pulse:

Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan said a key Fibonacci level, which is near the 17,600-level, acted as a crucial barrier. “Wednesday’s late selloff appears to be a part of the pullback, which is breaking up into lower degree waves. The index is expected to attract buying support again near the lower end of the falling channel,” he said.

Mazhar Mohammad of said Wednesday’s selling can be attributed to the cautionary action of the bulls ahead of the monthly expiry session. “In the next two sessions, it is critical for the markets to sustain above 17,216 levels on a closing basis,” he said.

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

Wall St slides as retail, tech stocks weigh

Wall Street indexes fell on Wednesday as data pointed to strength in the U.S. economy but signaled inflationary pressures, while disappointing earnings from retailers also weighed on the mood. At 10:25 a.m. ET, the Dow Jones Industrial Average was down 105.30 points, or 0.29%, at 35,708.50 and the S&P 500 was down 11.77 points, or 0.25%, at 4,678.93. The Nasdaq Composite was down 49.83 points, or 0.32%, at 15,725.31.

European shares climb higher

Pan European STOXX 600 index climbed 0.16% higher to 480.01 on Wednesday, while London’s FTSE 100 index rose 09.27%. German DAX Performance-Index slipped 0.26% for the day.

Tech View: Consolidation likely ahead

Analysts said that the Nifty50 may see some consolidation in the coming days after a sharp fall over the past few weeks. The benchmark index is likely to find firm support at 17,200 points, while 17,600-17,700 will act as a key resistance.

F&O: 17,200 to be strong support

While traders did buy the out-of-money put options of the Nifty50 index today, their buying was limited to the 17,300 strike price. They sold most strike price put options beyond 17,200 suggesting that they see the index finding a strong support at that level.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Jaiprakahs Associates, Adani Ports, NMDC, Ujaas Energy, and HBL Power Systems.

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 IRCTC, Infosys, Tube Investments, VIP Clothing, and ICICI Securities. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

One97 Communication (Rs 3607 crore), HDFC Bank (Rs 2348 crore), RIL (Rs 1844 crore), ICICI Bank (Rs 1767 crore), Bharti Airtel (Rs 1666 crore), Tata Power (Rs 1648 crore), Latent View (Rs 1347 crore), Zee Entertainment (Rs 1331 crore), Infosys (Rs 1256 crore) and Tata Motors (Rs 1037 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: 45.4 crore), Tata Power (Shares traded: 6.8 crore), YES Bank (Shares traded: 6.1 crore), Zomato (Shares traded: 5.4 crore), IOB (Shares traded: 4.5 crore), PNB (Shares traded: 4.1 crore), Zee Entertainment (Shares traded: 4.0 crore), Central Bank (Shares traded: 3.9 crore), and ONGC (Shares traded: 3.6 crore) were among the most traded stocks in the session.

Stocks showing buying interest

Latent View, Elgi Equipments, MTAR Technologies, Carborundum, Brightcom Group and Tata Tele witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Vikas Proppant, Spandana Sphoorty, Nidan Labs, and Destiny Logistics 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 229 stocks on the BSE500 index settled the day in the green, while 271 settled the day in the red.

Podcast: Are largecaps or sector leaders better bets?
Afternoon selling dragged benchmark indices in the red in what was a promising start for the day. But the broader market breadth remained largely positive, with three stocks rising on BSE for every two stocks that fell. Sensex declined 323 points to 58,341 while its broader peer Nifty50 fell half-a-per cent and could barely hold above the 17,400 mark. The BSE Smallcap index bucked the trend, rising 0.4 per cent. Should one stay with largecaps or sector leaders in this market?

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