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

MUMBAI: The Nifty50 index on Tuesday formed a bullish candle on the daily chart but was unable to sustain the recently formed higher highs as the index failed to close above the 18,000-mark once again.

Here’s how analysts read the market pulse:

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas said that the Nifty50 has been taking support near the key hourly moving averages for the last few sessions and the same was observed on Tuesday as well. “Some more confirmation is needed to qualify the upmove as a fresh rally. On the other hand, 17,860-17,900 will continue to act as a near-term support zone,” he said.

Mazhar Mohammad of Chartviewindia.in said the recent trading sessions remained largely indecisive, hinting that near term trend is still sideways but with a slight positive bias. “To resume strength bulls again need to get past 18,041 levels. In that scenario, initially, a higher target of 18,200 can be expected,” he said.

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

Wall Street trades flat

U.S. stock indexes were trading largely flat in a choppy session on Tuesday on worries over the impact of rising inflation on upcoming third-quarter earnings, while Tesla gained after record China-made vehicles sales. At 11:44 a.m. ET, the Dow Jones Industrial Average was down 11.12 points, or 0.03%, at 34,484.94, the S&P 500 was down 3.26 points, or 0.07%, at 4,357.93 and the Nasdaq Composite was down 17.22 points, or 0.12%, at 14,468.98.

Inflation jitters weigh on European stocks

European shares slipped on Tuesday as investors feared that soaring commodity prices would hamper a recovery in corporate profit. The pan-European STOXX 600 index was down 0.1%, hovering about 4% below its August peak. Worries about fallout from China’s struggling property sector also remained after Evergrande missed its third round of bond payments in three weeks.

Tech View: Support is seen at 17,860

Analysts said that the Nifty50 index will need to close above the 18,000-mark on Tuesday to further instill confidence in the bulls that the uptrend will sustain in the coming days. They expect the benchmark to find strong support at 17,860-17,880 points.

F&O: Buy on dips may continue

India VIX slipped 1.45 per cent from 16.08 to 15.84 level. Lower volatility has again provided buying support to the broader market at higher levels. Options data suggested a broader trading range between 17,400 and 18,200 levels while the immediate trading range was seen between 17,700 and 18,200 levels.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of IDFC First Bank, Walchandnagar, Bajaj Auto, Cochin Shipyard and JK Tyres.

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 RVNL, Moksh Ornaments, Zee Media, Sunteck Realty, Rain Industries, Jindal Stainless, Titagarh Wagons and Purvankara. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

Tata Motors (Rs 4132 crore), TCS (Rs 2105 crore), Tata Power (Rs 2042 crore), IEX (Rs 1967 crore), SBI (Rs 1611 crore), HCL Tech (Rs 1607 crore), IRCTC (Rs 1581 crore), BHEL (Rs. 1349), Infosys (Rs. 1248) and Jubilant Food (Rs 1105 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: 31.2 crore), BHEL (Shares traded: 19.5 crore), IDBI Bank (Shares traded: 6.8 crore), Suzlon Energy (Shares traded: 10.8 crore), YES Bank (Shares traded: 10.7 crore), Tata Power (Shares traded: 10.5 crore) and Tata Motors (Shares traded: 9.7 crore) were among the most traded stocks in the session.

Stocks showing buying interest

Network18, IDBI Bank, Radico Khaitan, Indian Bank, EID Parry, Vardhman Textiles and Home First Finance witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Inventure Growth, Krsnaa Diagnostics and Vera Synthetic 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 269 stocks on the BSE500 index settled the day in the green, while 231 ended the day in the red.

Podcast: Which sectors can perform well going ahead?
Benchmark indices took the winning streak to the fourth straight session on a day most Asian markets were deep in the red. Cues from European markets were weak but strong buying in banking and financial names and select stocks such as Reliance Industries and Titan Company lifted key indices. The NSE Nifty kissed the 18,000-level, but closed a tad below it. Sensex advanced 149 points for the day to close near the 60,300 level. Which sectors can perform well going ahead?

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