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

The benchmark NSE Nifty 50 rose 0.33% to 25,235.9, while the S&P BSE Sensex added 0.28% to 82,365.7. They added 1.6% this week and about 1% over August, notching their third straight weekly and monthly gain.

Here’s how analysts read the market pulse:
“The bulls are in full control of the markets at the current juncture and are using every dip to create long positions. Support for Nifty is now seen at 25,175-200 and 25,000-24,950 levels. On the higher side, immediate resistance for Nifty is at the 25,250 level and the next crucial resistance zone is at the 25,450-500 levels. Overall, more follow-up strength can be expected in today’s trading session,” said Tejas Shah, Technical Research, JM Financial & BlinkX.Rupak De of LKP Securities, said, “Market strength is likely to persist as long as the index stays above 25,000. A drop below this level could trigger a significant correction. On the upside, the current optimism could drive the index towards 25,500 in the near term.”

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

US market

The Nasdaq and S&P 500 ended higher on Friday, with Tesla and Amazon climbing after fresh US economic data raised expectations that the Federal Reserve will cut interest rates modestly in September.

US consumer spending increased solidly in July, suggesting the economy remained strong while prices rose moderately.

The S&P 500 gained 1.00% to end at 5,647.60 points, while the Nasdaq Composite gained 1.11% to 17,710.73. The Dow Jones Industrial Average rose or 0.52% to 41,549.91.

European shares

European shares rose to an all-time high on Friday, closing a turbulent month on a bright note after a significant drop in eurozone inflation cemented market expectations for an interest rate cut in September.

The pan-European STOXX 600 index edged up 0.1%, closing above 525 points for the first time after touching an intraday record high of 526.66 points. The index gained 1.2% in August, rising for a second consecutive month.

Spain’s IBEX 35 gained 0.4% after retail sales data showed an uptick of 1% in July, while Germany’s DAX closed flat after data showed unemployment rose less than expected.

Tech View: Rounding bottom pattern

Nifty ended Friday’s session with a gain of 84 points and formed a rounding bottom pattern, indicating strength, on the daily chart.Based on this breakout, the index could advance towards 25,500 levels in the short term. If the index sustains above 25,500, Nifty could head towards the 26,000-26,250 levels, which is the target of the rounding bottom pattern, Hrishikesh Yedve, Asit C. Mehta Investment Interrmediates, said.

“On the downside, the 9-day Exponential Moving Average (DEMA), positioned near 24,950, will act as immediate support for the Nifty in the short term. As long as the index remains above 24,950, a ‘buy on dips’ strategy should be adopted,” he said.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Paytm, Safari Industries, Praj Industries, Prestige Estates, RVNL, and Sapphire Foods among others.

Stocks signaling weakness ahead

The MACD showed bearish signs on the counters of Aster DM Healthcare, Bharat Forge, Inox Wind, Kfin Technologies, Aurobindo Pharma, and Aegis Logistics, among others. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

HDFC Bank (Rs 36,481 crore), RVNL (Rs 7,350 crore), RIL (Rs 6,298 crore), Dixon Technologies (Rs 6,101 crore), Bharti Airtel (Rs 6,011 crore), Oil India (Rs 5,913 crore), and Prestige Estate (Rs 4,132 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

HDFC Bank (Shares traded: 22.2 crore), RVNL (Shares traded: 12.2 crore), Shree Renuka Sugar (Shares traded: 11.3 crore), YES Bank (Shares traded: 11.1 crore), Bandhan Bank (Shares traded: 10.9 crore), Oil India (Shares traded: 7.9 crore), and Suzlon Energy (Shares traded: 5.4 crore) among others were among the most traded stocks in the session on NSE.

Stocks showing buying interest

Shares of Triveni Engineering & Industries, Sundaram Finance, Radico Khaitan, Godfrey Phillips, GSPL, Safari Industries, and KEC International among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

No major shares hit their 52-week low on Friday.

Sentiment meter favours bulls

Overall, market breadth favoured bulls as 2,157 stocks ended in the green, while 1,784 names settled in the red.

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