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


NEW DELHI: Nifty50 on Tuesday ended with marginal cuts, forming an indecisive candle on the daily chart for the second day in a row. Analysts said the advance-decline ratio in favour of bears suggests the market is losing momentum.

Here’s how analysts read the market pulse:


Mazhar Mohammad of Chartviewindia.in said sell signals were visible on the twin momentum oscillators. “This weakness will be confirmed if Nifty trades below 17,287 level in the next session. In that scenario, an initial target of 17,200 can be expected,” he said.

Gaurav Ratnaparkh of Sharekhan said Nifty is stepping into a short-term consolidation and is poised to take a dip towards the lower end of the rising channel, which is near 17,000. “The 17,000-17,500 levels are expected to be the short-term range for Nifty now,” he said.

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

Wall St slips over slow recovery worries

The Dow Jones and S&P 500 fell on Tuesday, as worries over the slowing pace of economic recovery overshadowed hopes that the Federal Reserve would maintain its accommodative stance a little longer after a soft U.S. payrolls report. At 10:11 a.m. ET, the Dow Jones Industrial Average was down 254.32 points, or 0.72 per cent, at 35,114.77, the S&P 500 was down 18.83 points, or 0.42 per cent, at 4,516.60, and the Nasdaq Composite was down 3.02 points, or 0.02 per cent, at 15,360.50.

European shares fall

London’s FTSE 100 index ended lower on Tuesday, weighed down by healthcare stocks and brokerages, while DS Smith jumped to the top of the index after an upbeat trading update. The blue-chip index fell 0.5 per cent and marked its worst session in nearly three weeks, as healthcare weighed with drugmakers AstraZeneca and GlaxoSmithKline among top drags.

Tech View: Nifty bulls indecisive at highs

Nifty50 on Tuesday snapped a three-day winning run and formed an indecisive candle on the daily scale, the second time in a row. The index negated the higher low formations that it was making for the last six sessions. The advance-decline ratio also was skewed in favour of the bears, suggesting a loss of momentum.

F&O: VIX falls below 15 level

India VIX fell 1.36 per cent from 15.10 to 14.89 level. A rise in volatility from a lower level is a cause of volatile swings in the market. India VIX needs to hold below the 13-level to continue the bullish momentum. Options data suggested a broader trading range between 16,800 and 17,800 levels while the immediate trading range was seen between 17, 100 and 17 500 levels.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of NMDC, HDFC, Jindal Stainless, Dollar Industries, Century Plyboards, Intrasoft Technologies, Arvind, JK Lakshmi Cement, Vardhman Special, Commercial Engineers, KIOCL, IOL Chemicals, Mercator, Sanghvi Movers, Ambika Cotton, DCM Shriram, WABCO India, Intense Technologies, Swaraj Engines, Hitech Corporation, The Grob Tea Company, The Indian Card Clot and Kalyani Investment.

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 HCL Technologies, Fortis Healthcare, Balrampur Chini, JSW Energy, Confidence Petroleum, Sanghi Industries, Apollo Hospitals, Emami, Datamatics Global, Bata India, Solar Industries, Bajaj Holdings, Zota Healthcare, Golden Tobacco, Sheela Foam, Ratnamani Metals and NDR Auto Components. 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 3705.92 crore), RIL (Rs 1951.82 crore), Bharti Airtel (Rs 1849.98 crore), HDFC (Rs 1146.63 crore), Voltas (Rs 1045.60 crore), Tata Steel (Rs 914.41 crore), Vodafone Idea (Rs 839.00 crore), Indian Energy Exchange (Rs 838.14 crore), ITC (Rs 796.47 crore) and Can Fin Homes (Rs 648.54 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: 106.07 crore), Dish TV India (Shares traded: 9.06 crore), YES Bank (Shares traded: 5.95 crore), BHEL (Shares traded: 4.18 crore), ITC (Shares traded: 3.75 crore), NALCO (Shares traded: 3.66 crore), IDFC First Bank (Shares traded: 3.66 crore), PNB (Shares traded: 3.10 crore), Zomato (Shares traded: 3.04 crore) and SAIL (Shares traded: 2.94 crore) were among the most traded stocks in the session.

Stocks showing buying interest

IRCTC, Voltas, Hatsun Agro, Balaji Amines and Can Fin Homes witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure

Nandani Creation, Praxis Home Retail, Stylam Industries, Ujjivan Financial Services and Varroc Engineering witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bears

Overall, the market breadth remained in favour of the bears. As many as 169 stocks on the BSE500 index settled the day in the green, while 328 settled the day in the red.

Podcast: What’s behind volatility in markets today?
BSE Sensex shed merely 17 points to settle at 58,280. Nifty 50 retreated 16 points to close at 17,362. It could not hold on to 17,400 for long. Broader markets underperformed as BSE midcap and smallcap indices ended in the red. What were the key factors behind the volatility in markets today? Nifty 50 was unable to hold to 17,400 levels. Where is it headed?



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