Ahead of Market: 10 things that will decide D-Street action on Monday

Estimated read time 15 min read
Indian equity indices advanced on Thursday to close the fiscal year with weekly and quarterly gains in a holiday-shortened week, led by financials after the central bank eased recently tightened rules for lenders’ investments in alternative investment funds.

The blue-chip NSE Nifty 50 index rose 0.92% to 22,327, while the BSE Sensex settled 0.90% higher at 73,651.

Here’s how analysts read the market pulse:
“Nifty has rallied significantly, surpassing the 22,500 mark after maintaining momentum beyond 22,100. Furthermore, there’s a clear breakout in consolidation on the daily timeframe, signaling rising optimism. Nevertheless, Nifty encountered initial resistance near its previous swing high of 22,526. Consequently, to sustain a continued rally, it must surpass the 22,525 level decisively. On the downside, 22,200 could serve as short-term support,” Rupak De of LKP Securities.

Deepak Jasani, Head of Retail Research at HDFC Securities, said, “Nifty once again formed a bull candle with high upper shadow, reflecting selling pressure on rises. Nifty rose 1.04% for the week, 1.57% for the month and 1.80% for the quarter. 22526 is proving tough to be breached on the up, while 21973-22180 band could provide the near-term support for the markets.”

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

US market

Wall Street set more records Thursday as US stocks coasted to the close of their latest winning month and quarter.

The S&P 500 added 5.86 points, or 0.1%, to its all-time high set a day before and closed at 5,254.35. That sent its gain for the year’s first three months to a fat 10.2%. The only quarter that’s been better in the last two years was the one that came just before.

European shares

Europe’s STOXX 600 closed at a record high on Thursday, finishing its second-straight quarter in gains, with retailer JD Sports notching its strongest day in over four years after reiterating its annual profit forecast.

The pan-European STOXX 600 ended 0.2% up, closing a week that was marked by four range-bound sessions ahead of a holiday extended weekend.

Tech View: Bull candle

Nifty on Thursday ended 203 points higher to form a reasonable bull candle with a long upper shadow on the daily chart, reflecting selling pressure near all-time highs around 22,500 levels.

The near-term uptrend of the Nifty remains intact with high volatility. The next upside levels to be watched are around 22500-22600. Immediate support is at 22250-22200 levels, said Nagaraj Shetti of HDFC Securities.

Stocks showing bullish bias:

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Aegis Logistics, VIP Industries, Latent View Analytic, Bank of Maharashtra, Suzlon Energy, and Grasim Industries, among others.

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 signaling weakness ahead

The MACD showed bearish signs on the counters of Whirlpool India, SBI Card, Delhivery, and Team Lease Service among others. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms

HDFC Bank (Rs 4,035 crore), RIL (Rs 3,266 crore), Bajaj Finance (Rs 2,591 crore), ICICI Bank (Rs 2,423 crore), Infosys (Rs 1,876 crore), TCS (Rs 1,673 crore), and SBI (Rs 1,629 crore), among others, were among the most active stocks on NSE 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

Tata Steel (Shares traded: 6.2 crore), ITC (Shares traded: 2.8 crore), HDFC Bank (Shares traded: 2.8 crore), Power Grid (Shares traded: 2.6 crore), ICICI Bank (Shares traded: 2.2 crore), SBI (Shares traded: 2.2 crore), and NTPC (Shares traded: 2 crore) among others, were among the most traded stocks in the session on NSE.

Stocks showing buying interest

Shares of Grasim Industries, L&T, Adani Ports, Sun Pharma, and Maruti Suzuki among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Shares of Delta Corp, Vinati Organics, Rajesh Exports, Zee Entertainment Enterprises, Lux Industries, Alkyl Amines, and Campus Activewear hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears

Overall, market breadth favoured bears as 2,042 stocks ended in the red, while 1,793 names settled in the green.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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