Mazhar Mohammad of Chartviewindia.in said, “If the Nifty50 index trades below Monday’s bullish gap zone of 14,383-367 levels, it can come under profit booking. If it closes below 14,367, the correction can be slightly higher towards 14,167. Meanwhile, if the bulls manage to push the index beyond 14,500, the upswing can expand towards 14,750 level.”
“Improved outlook for third quarter earnings along with strong global cues helped Sensex breach the 49,000-mark. The rally in the market was led by the IT sector, backed by firm earnings results. However, small- and mid-cap stocks were under pressure. Hopes of a new US stimulus to be unveiled this week created an upbeat movement in Wall Street, while profit-booking was seen in the European markets,” said Vinod Nair, Head of Research at Geojit Financial Services.
That said, here’s a look at what some of the key indicators are suggesting for Tuesday’s action:
US stocks retreat from all-time highs
Wall Street’s main indexes slipped from record levels on Monday as investors locked in gains after a stellar vaccine and stimulus-fueled rally, while Twitter shares slumped following the permanent suspension of President Donald Trump’s account. The Dow Jones Industrial Average fell 167.89 points, or 0.54%, to 30,930.08, the S&P 500 lost 28.84 points, or 0.75%, to 3,796.14 and the Nasdaq Composite lost 161.41 points, or 1.22%, to 13,042.36.
European shares rally falters
European stocks fell from over 10-month highs on Monday after rallying last week, as investors feared a surge in coronavirus cases across the continent and mainland China could delay an economic recovery. The pan-European STOXX 600 index fell 0.63%, easing from its February 2020 peak hit on Friday. Germany’s DAX index shed 0.94% after hitting all-time highs last week and France’s CAC 40 was down 0.84%.
Tech View: Nifty charts supportive of rally
Nifty50 on Monday scaled a new high and closed near the immediate resistance at 14,500 level. The index formed a higher high for the 13th session in a row, which is seen as a positive sign. Analysts said nothing concrete on the technical charts suggests the index’s ongoing rally is in danger. If anything, the index formed an indecisive ‘Dragonfly Doji’ on the daily chart. “Such a pattern is usually seen around potential turning points, which is hinting at a balance of power between the bulls and the bears at the top,” said Mazhar Mohammad of Chartviewindia.in.
Check out the candlestick formations in the latest trading sessions
ETMarkets.com
F&O: VIX needs to cool down below 20
India VIX rose 8.44% from 20.64 to 22.38 level. Volatility needs to cool down below 20 level to support the bullish market setup and fuel the next rally with a higher market base. There was minor Call writing at 15,000 and then 14,700 levels, while there was Put writing at 14,000 and then 14,400 levels. Options data suggested a wider trading range between 13,800 and 14,800 levels, while there is an immediate trading range between 14,300 and 14,600 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Monday showed bullish trade setup on the counters of ONGC, HDFC Bank, Tata Consumer Product, Anant Raj, Chennai Petroleum Corporation, General Insurance Corporation, Narayana Hrudayalaya, Phoenix Mills, Redington (India), Century Plyboards, PSP Projects, Autolite (India), AMJ Land Holdings, Alembic Pharmaceuticals, Munjal Showa, Sastasundar Ventures, Hester Biosciences, Tube Investments, Sundaram Fasteners, Century Enka, Polyplex Corporation, Future Enterprises, Cigniti Technologies, Gulf Oil Lubricants, Vishwaraj Sugar Industries, 3M India, P&G Hygiene & Health and NBI Industrial Finance.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of SBI, Usha Martin, HBL Power Systems, Borosil Renewables, Orient Cement, InterGlobe Aviation, Spencer’s Retail, Gujarat Gas, Fineotex Chemical, Andhra Cement, Astra Microwave, Confidence Petroleum, Oberoi Realty, Man Infraconstruction, HPL Electric & Power, Rites Ltd, UFO Moviez India, HSIL, Tilaknagar Industries, MEP Infrastructure, Jindal Worldwide, Som Distilleries, Nitco, KNR Constructions, Hindustan Media Ventures, India Tourism Development Corporation, Astec Lifesciences, Whirlpool of India, Mahindra CIE Auto, Everest Industries, TCI Ltd, Apollo Pipes, Indostar Capital Finance, Nilkamal, Bombay Super Hybrid and N K Industries.
Monday’s most active stocks
Tata Motors (Rs 3858.42 crore), TCS (Rs 3018.00 crore), RIL (Rs 2936.37 crore), Infosys (Rs 2805.85 crore), Wipro (Rs 2105.61 crore), Maruti Suzuki (Rs 1774.88 crore), HDFC (Rs 1615.25 crore), Bajaj Finance (Rs 1462.48 crore), HCL Tech (Rs 1383.87 crore) and HDFC Bank (Rs 1258.94 crore) were among the most active stocks on Dalal Street on Monday in value terms.
Monday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 22.14 crore), YES Bank (Shares traded: 18.94 crore), Tata Motors (Shares traded: 18.25 crore), PNB (Shares traded: 7.66 crore), Rail Vikas Nigam (Shares traded: 7.03 crore), Trident (Shares traded: 5.69 crore), RattanIndia Power (Shares traded: 4.92 crore), GTL Infra (Shares traded: 4.76 crore), Wipro (Shares traded: 4.73 crore) and HFCL (Shares traded: 4.72 crore) were among the most traded stocks in the session.
Stocks showing buying interest
FACT, Tata Motors, Tata Motors (DVR), IndiabullsVentures (PP) and IndiabullsVentures witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Monday signalling bullish sentiment.
Stocks seeing selling pressure
Jump Networks and Vishal Fabrics witnessed strong selling pressure in Monday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favour bears
Overall, market breadth remained in favour of bears. As many as 231 stocks on the BSE 500 index settled the day in green, while 265 settled the day in red.
Podcast: Why banking stocks are looking so dull >>>
A surge in virus cases in mainland China might have hurt sentiment across Asia and Europe, but domestic stocks stayed unfazed on Monday, rejoicing a strong start to earnings season and hoping more dollars will flow into India on a likely trillion dollar-plus stimulus in the US. Sensex climbed 487 points to close at a fresh record of 49,269.32 while Nifty settled near 14,500. We caught up with AK Prabhakar of IDBI Capital to know his views on the direction of the market and different sectors.
