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

MUMBAI: Nifty50 formed an indecisive candle on the daily chart today as it closed lower for the second successive session. The headline index, however, managed to sustain itself above the 18,000-mark and its 20-day exponential moving average.

Here’s how analysts read the market pulse:

Gaurav Ratnaparkhi of Sharekhan said, Nifty50 breached its key hourly moving averages initially but there was no follow-through selling. “The index received buying support as it moved near a rising trendline on the hourly chart. But it stumbled near 61.8 per cent retracement of the previous fall,” he said.

Mazhar Mohammad of said Nifty50 did not breach the 20-day moving average on the downside, which may act as initial support, as it offered resistance for a couple of sessions on earlier pull-back attempts.

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

Wall Street slides on inflation fears

Wall Street’s main indexes fell on Wednesday as a surge in U.S. consumer prices last month deepened fears that high inflation is here to stay amid supply chain snarls. At 9:46 a.m. ET, the Dow Jones Industrial Average was down 45.26 points, or 0.12 per cent, at 36,274.72, the S&P 500 was down 10.27 points, or 0.22 per cent, at 4,674.98 and the Nasdaq Composite was down 88.51 points, or 0.56 per cent, at 15,798.03.

European stocks inch up on earnings

European stocks hovered below all-time highs on Wednesday, supported by a jump in oil companies and some strong earnings reports ahead of a key U.S. inflation reading. The pan-European STOXX 600 climbed 0.14 per cent as British retailer Marks & Spencer surged 16.34 per cent after exceeding first-half profit forecasts and hiking its full-year outlook.

Tech View: Analysts stay positive

The market appeared to be in a tug-of-war between bulls and bears as it has failed to show any buying momentum above the 18,000 points mark. Analysts said that the benchmark needs to close above the 18,100 points level to continue its up move.

F&O: Sideways movement seen likely

In the derivatives segment, traders appeared more circumspect as they sold both out-of-money call and put options of the Nifty50 that indicated they are expecting more rangebound movement from the index in the coming sessions.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of Aurobindo Pharma, Bombay Dyeing, NIIT, REC, and BPCL.

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 Tata Motors, Jindal Stainless, Sun TV, Maruti Suzuki India, and AU Small Finance Bank. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

FSN E-Commerce (Rs 7172 crore), M&M (Rs 1563 crore), Tata Steel (Rs 1545 crore), Tata Motors (Rs 1360 crore), RIL (Rs 1201 crore), Bank of Baroda (Rs 1170 crore), Tata Power (Rs 1140 crore), Bharti Airtel (Rs 1104 crore), HDFC Bank (Rs 1068 crore) and HDFC (Rs 962 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

Vodafone Idea (Shares traded: 22.5 crore), BHEL (Shares traded: 13.8 crore), Bank of Baroda (Shares traded: 11.3 crore), SAIL (Shares traded: 6.8 crore), Tata Power (Shares traded: 4.8 crore), YES Bank (Shares traded: 4.3 crore), PNB (Shares traded: 4.1 crore), Indiabulls Housing (Shares traded: 3.8 crore), and FSN E-Commerce (Shares traded: 3.4 crore) were among the most traded stocks in the session.

Stocks showing buying interest

FSN E-Commerce, KPIT Tech, Olectra Greentech, Grindwell Norton, Macrotech Developers and Bharti Airtel PP witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

CarTrade Tech, Aarti Drugs, and AstraZeneca 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 bulls. As many as 201 stocks on the BSE500 index settled the day in the green, while 299 settled the day in the red.

Podcast: What led to the late recovery in the markets?
The BSE barometer Sensex shed merely 80 points to close just about 60,350. Its broader peer, Nifty50, was able to settle above the 18,000 mark, recovering more than 100 points from the day’s lows. The benchmark index gave up 27 points to settle at 18,017. Broader markets ended mixed. BSE midcap index shed half a per cent, whereas BSE Smallcap index ended the session on a flat note. Fear gauge India VIX jumped 2 per cent. What factors led to the recovery in the markets in the second half?

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