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

Indian headline equity indices Sensex and Nifty50 posted their steepest drop in two months on Monday amid profit booking and a largely weak Asian markets where Japan’s Nikkei index tanked nearly 5%.

The NSE Nifty 50 index ended 1.41% lower at 25,810, while the BSE Sensex ended 1.5% lower at 84,299. Both indices logged their worst day since August 5.

Here’s how analysts the market pulse:

“The Nifty slipped sharply following a brief pause in the previous trading session, breaking below its recent consolidation. This decline was accompanied by a significant negative divergence in the RSI (14), indicating potential further weakness. Sentiment may remain weak in the near term, with support placed at 25,750. A break below 25,750 could lead to further correction. On the higher side, resistance is seen at 26,000,” said Rupak De, LKP Securities.

Hrishikesh Yedve of Asit C Mehta Investment Interrmediates, said, “Technically, on the daily chart, the index formed a red candle and closed below the crucial support level of 26,000, indicating weakness. On the downside, the index will find strong support near its 21-DEMA, placed around 25,540, followed by 25,350. As long as the Nifty remains below 26,000, further weakness will be anticipated. As a result, a short-term “sell on rise” approach is recommended.”

That said, here’s a look at what some key indicators are suggesting for Tuesday’s action:US market
Wall Street’s main indexes were flat to lower in choppy trading on Monday as investors paused after the previous week’s rally and exercised caution ahead of numerous job reports and comments through the week from Federal Reserve policymakers, including Chair Jerome Powell.

At 11:48 a.m. ET, the Dow Jones Industrial Average fell 146.01 points, or 0.35%, to 42,166.99, the S&P 500 lost 2.59 points, or 0.05%, to 5,735.58 and the Nasdaq Composite gained 8.62 points, or 0.05%, to 18,128.21.

Six of the 11 S&P 500 sectors were lower. The materials index was at the bottom with a 1% decline after logging its best week since early December on Friday.

The Dow and the S&P 500 were hovering near all-time highs and were set to log gains for the fifth straight month, bucking a historical trend where September has been weak for equities on average.

European shares
Europe’s STOXX 600 closed lower on Monday with automakers leading declines after industry majors Stellantis and Volkswagen’s profit warnings, though the benchmark recorded quarterly and monthly gains.

The pan-European STOXX 600 closed 1% lower, retreating from an all-time high hit last week.

European auto stocks were at the helm of losses, down 4% with Milan-listed shares of Stellantis NV sliding 14.7% after Europe’s second-biggest carmaker cut its 2024 profit forecast and warned it will burn through more cash than expected.

Tech View: Long bear candle
A long bear candle was formed on the daily chart with a gap-down opening. Technically, this chart pattern is indicating a bearish reversal type candle pattern (a type of bearish evening star- not a classical one). This market action is also signaling a short-term top reversal action for the Nifty and expect some more weakness in the coming sessions, said Nagaraj Shetti of HDFC Securities.

In the open interest (OI) data, the highest OI on the call side was observed at 26,000 and 26,200 strike prices, while on the put side, the highest OI was at 25,800 strike price followed by 25,700.

Stocks showing bullish bias:

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Sundaram Finance, BASF India, Pidilite Industries, Sun Pharma, Brigade Enterprises, Muthoot Finance, PCBL, and Polycab 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 Craftsman Automation, TVS Holdings, Concord Biotech, Mrs Bectors, Jubilant Pharmova, and Mallcom among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms:

RIL (Rs 4,020 crore), HDFC Bank (Rs 2,288 crore), ICICI Bank (Rs 1,614 crore), Tata Steel (Rs 1,561 crore), Infosys (Rs 1,314 crore), SBI (Rs 1,226 crore), and Tata Motors (Rs 1,197 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 highest trading turnovers in the day.

Most active stocks in volume terms:

Vodafone Idea (Shares traded: 46.9 crore), Shree Renuka Sugars (Shares traded: 14.83 crore), Tata Steel (Shares traded: 9.2 crore), Easy Trip Planners (Shares traded: 7.2 crore), JM FInancial (Shares traded: 6.9 crore), YES Bank (Shares traded: 6.9 crore), and IDFC First Bank (Shares traded: 5.5 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest:

Shares of Saregama India, AstraZeneca Pharma, Vijaya Diagnostic, ABB Power, JM Financial, Whirlpool India, and Welspun Corp 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 Ujjivan Small Finance Bank, and CSB Bank hit their 52-week lows, signaling bearish sentiment on the counter.

Sentiment meter bears:

Overall, market breadth favoured bears as 2,223 stocks ended in the red, while 1,819 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 the Economic Times)

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