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


MUMBAI: Nifty50 on Wednesday formed a bearish candle on the daily chart as the benchmark index succumbed to selling pressure for the second successive session.

Here’s how analysts read the market pulse:


Rohit Singre, Senior Technical Analyst at LKP Securities said Nifty50 has formed a small consolidation zone between 17,600-18,000 levels. “Unless we don’t see a breakout on either side, we may not see a clear directional move. Profit-booking can be witnessed towards the immediate support zone of 17,750-17,700,” he said.

Mazhar Mohammad of Chartviewindia.in said that Nifty50 appeared to be in a consolidation mode, as profit-booking continued for the last two trading sessions without violating the short-term critical support at 17,697-level.

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


Wall St slips lower as focus shifts to Fed


US stocks indexes edged lower on Wednesday as investors looked ahead to the Federal Reserve’s widely expected move to signal the withdrawal of its pandemic-era support, while Activision Blizzard slid on a gloomy outlook and a leadership change. At 10:22 a.m. ET, the Dow Jones Industrial Average was down 114.93 points, or 0.32 per cent, at 35,937.70, the S&P 500 was down 7.10 points, or 0.15 per cent, at 4,623.55, and the Nasdaq Composite was up 7.36 points, or 0.05 per cent, at 15,656.96.


Oil stocks weigh on FTSE 100

London’s FTSE 100 slipped on Wednesday as losses in heavyweight oil stocks outweighed a rebound in miners, while traders held back on uncertainty around a potential UK rate hike. The commodity-heavy FTSE 100 index declined 0.3 per cent, with gains in metal stocks offset by weakness in oil majors Royal Dutch Shell and BP. Broader STOXX Europe 600 inched higher by 0.26 per cent.


Tech View: 18,000 remains key hurdle


Analysts said that the Nifty50 index is likely to stay in a consolidated mode in the coming sessions as it lacks momentum to cross a strong resistance at 18,000 points mark. Strength in the Nifty50 will be expected only if it closes above 18,000 points and in such a case 18,200-250 levels are likely, said Mazhar Mohammad of Chartviewindia.in.


F&O: Hope remains high


In the derivatives segment, traders sold both the out-of-money call and put options of the Nifty50 index suggesting that they expect the index to move sideways in the coming sessions. The high accumulation of open interest in the 18,000-strike price call option suggests that the level will act as a stiff resistance.


Stocks showing bullish bias


Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of L&T, Mazagon Dock, L&T Financial Services, Oberoi Realty, and Sobha.

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 Rail Vikas Nigam, Tata Motors, Escorts, Viji Finance, Divi’s Lab, Borosil Renewables, Allied Digital Services, and Indoco Remedies. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.


Most active stocks in value terms


SBI (Rs 4279 crore), L&T (Rs 2188 crore), Bharti Airtel (Rs 1654 crore), RIL (Rs 1376 crore), Tata Power (Rs 1142 crore), Tata Motors (Rs 1120 crore), HDFC (Rs 1082 crore), ICICI Bank (Rs 938 crore), IRCTC (Rs 837 crore) and HDFC Bank (Rs 814 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 the highest trading turnovers in the day.


Most active stocks in volume terms


SBI (Shares traded: 8.1 crore), Vodafone Idea (Shares traded: 7.9 crore), Bank of Baroda (Shares traded: 6.9 crore), PNB (Shares traded: 6.4 crore), YES Bank (Shares traded: 5.1 crore), Tata Power (Shares traded: 5.0 crore), SAIL (Shares traded: 4.1 crore), BHEL (Shares traded: 4.0 crore), IDFC First Bank (Shares traded: 3.3 crore) and Canara Bank (Shares traded: 3.1 crore) were among the most traded stocks in the session.


Stocks showing buying interest


Sobha, eClerx, SKF India, Oberoi Realty, Mazagon Dock and Relaxo Footwear witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.


Stocks seeing selling pressure


Airo Lam, Hathway Cable, RPP Infra, and Kotyark Industries 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 219 stocks on the BSE500 index settled the day in the green, while 281 settled the day in the red.


Podcast: What are the expectations for Samvat 2078?
Benchmark indices ended Samvat 2077 on a weak note, in an otherwise solid year for stocks, thanks to cautiousness ahead of the Fed policy outcome later in the day. The BSE Sensex shed 257 points to end at 59,772 odd level. Nifty faced selling pressure at 18,000 level, before closing the session at 17,829. Given the rally this Samvat, what are your return expectations from the forthcoming year?



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