market outlook: Ahead of Market: 10 things that will decide stock action on Friday

India’s benchmark indices and mid-cap stocks settled at record closing highs on Wednesday, led by metal and energy stocks on expectations of strong global demand.

The NSE Nifty 50 was up 0.49% at 22,754, hitting an all-time high in intraday trade for the third straight session, while the S&P BSE Sensex added 0.47% to 75,038.

Here’s how analysts read the market pulse:

“The resistance zone is placed at 22,700-22,750, while support is at 22,600. A decisive move above 22,750 might induce a rally towards 23,000 in the short term. Since the market appears to be range-bound, buying on dips and selling on rallies might prove to be a good strategy with proper stop-loss measures,” Rupak De of LKP Securities.

Mandar Bhojane of Choice Broking, said, “Both the daily and hourly momentum indicators exhibited a positive crossover, signaling a buy opportunity. Additionally, the daily Bollinger bands displayed an expansion, suggesting increased range, and with prices trending along the upper band, the possibility of sustained upward movement in the forthcoming trading sessions is implied.”

That said, here’s a look at what some key indicators are suggesting for Friday’s action:US stocks rise
Wall Street’s main stock indexes opened higher on Thursday after softer-than-anticipated producer prices data soothed investor fears about sticky inflation, keeping hopes of rate cuts from the Federal Reserve this year alive.

The Dow Jones Industrial Average rose 61.75 points, or 0.16%, at the open to 38,523.26.

European shares
European shares slipped on Thursday as investors avoided big bets ahead of a monetary policy decision by the European Central Bank and remarks by ECB’s Christine Lagarde on the outlook for interest rate cuts.

The pan-European STOXX 600 lost 0.3%, as of 0906 GMT. The telecommunications sector led sectoral declines, weighed by a 5.5% drop in Deutsche Telekom as the company traded ex-dividend.

Tech View: High wave type candle
Nifty today formed a high wave type candle on the daily chart as it ended the session 111 points higher.

Nifty is currently placed at the hurdle of around 22800 levels (ascending resistance trend line and 1.618% Fibonacci extension). Though, Nifty placed near the hurdle, still there is no sign of any reversal forming at the highs. Immediate support is at 22615 levels. A decisive move above 22800 levels is expected to open further upside momentum for the market ahead, said Nagaraj Shetti of HDFC Securities.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Archean Chemical, HPCL, Vinati Organics, Bata India, Medplus Health, and Tata Consumer 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 REC, Titan Company, Granules India, Astral Poly Tech, Union Bank India, and Gillette India 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
HDFC Bank (Rs 2,140 crore), RIL (Rs 1,350 crore), ICICI Bank (Rs 1,176 crore), SBI (Rs 1,123 crore), Tata Steel (Rs 1,069 crore), Infosys (Rs 1,011 crore), and Kotak Bank (Rs 1,003 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
Tata Steel (Shares traded: 6.4 crore), Coal India (Shares traded: 1.6 crore), SBI (Shares traded: 1.4 crore), ITC (Shares traded: 1.4 crore), HDFC Bank (Shares traded: 1.4 crore), NTPC (Shares traded: 1.3 crore), and Hindalco (Shares traded: 1.2 crore)among others were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Eicher Motors, ICICI Bank, NTPC, and M&M 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 stocks hit their 52-week low on Wednesday.

Sentiment meter favours bears
Overall, market breadth favoured bears as 1,939 stocks ended in the red, while 1,904 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)