Chandan Taparia of Motilal Oswal Securities said, Nifty needs to decisively hold above 14,400 level to witness a bounce towards 14,600 and 14,700 levels, while on the downside, support exists at 14,250 and 14,150 levels.
“The market has been going through a correction phase following increasing Covid-19 cases despite the optimism about the vaccination drive. Though the earnings outcome is expected to trigger stock-specific movements in the coming days, the broader movement in the market will depend on fall in Covid cases,” said Vinod Nair, Head – Research, Geojit Financial Services.
That said, here’s a look at what some of the key indicators are suggesting for Friday’s action:
US stocks edge lower as Covid-19 cases rise
The S&P 500 and Dow Jones indexes edged lower on Thursday as a resurgence of COVID-19 cases globally sapped appetite for stocks, with data showing tepid U.S. home sales adding to the grim mood. he Dow Jones Industrial Average was down 150.19 points, or 0.44%, at 33,987.12, the S&P 500 was down 7.42 points, or 0.18%, at 4,166.00 and the Nasdaq Composite was up 10.43 points, or 0.07%, at 13,960.65.
Solid earnings lift European stocks
European stocks moved towards record highs on Thursday after stumbling earlier in the week, as a set of strong earnings reports brightened sentiment. The pan-European STOXX 600 index rose 0.70%, extending gains for a second day, after fears of a new wave of COVID-19 cases pushed European markets to their worst day in 2021 on Tuesday.
Tech View: Nifty50 forms a Reversal Piercing Line
Nifty50 closed above the 14,400 level on Thursday and formed a Reversal Piercing Line pattern on the daily chart. During the day, the index saw a recovery from its 100-day EMA (exponential moving average). It eventually closed above its 100-day simple moving average (SMA). Analysts said the index recovered despite breaking below its crucial support at 14,250 level in the opening trade, which suggests it was a false breakout. They expect some further recovery in the coming days. In a perfect Piercing Line pattern, the index needs to be close above the mid-point of the previous session’s candle body. In Thursday’s case, it would have been at 14,411.
Check out the candlestick formations in the latest trading sessions
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F&O: Rising VIX a cause of worry
India VIX moved up 2.70% from 22.42 to 23.02 level. It needs to hold below 20 level to again facilitate a bullish stance in the market. On the options front, maximum Put Open Interest stood at 14,000 level followed by 13,500, while maximum Call OI was at 15,000 level followed by 14,500 levels. There was Call writing at 14,800 level and then 15,000, while Put writing was seen at 14,000 and 14,200 levels. Options data suggested a wider trading range between 14,000 and 14,700 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Thursday showed bullish trade setup on the counters of TV18 Broadcast, ICICI Bank, Petronet LNG, Hindustan Zinc, Jubilant Foodworks, Aarti Drugs, Borosil Renewables, J B Chemicals, DFM Foods and TVS Srichakra.
The MACD is known for signalling 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 signalling weakness ahead
The MACD showed bearish signs on the counters of Godrej Consumer Products, MOIL, Capri Global Capital, Ganesh Housing,
, Privi Speciality Chemicals, Neogen Chemicals, Agri-Tech (India), TCI and Garware Technical Fibres. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Thursday’s most active stocks
Tata Steel (Rs 2954.68 crore), HDFC Bank (Rs 2681.02 crore), Wipro (Rs 2073.59 crore), ICICI Bank (Rs 1992.18 crore), Adani Ports & SEZ (Rs 1952.70 crore), Tata Motors (Rs 1812.02 crore), SBI (Rs 1633.80 crore), JSW Steel (Rs 1460.28 crore), RIL (Rs 1269.69 crore) and Dr. Reddy’s (Rs 1269.22 crore) were among the most active stocks on Dalal Street on Thursday in value terms.
Thursday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 12.14 crore), PNB (Shares traded: 10.05 crore), Yes Bank (Shares traded: 6.51 crore), Tata Motors (Shares traded: 6.10 crore), Indiabulls Housing Finance (Shares traded: 6.01 crore), TV18 Broadcast (Shares traded: 5.81 crore), SAIL (Shares traded: 5.63 crore), Morepen Labs (Shares traded: 5.41 crore), SBI (Shares traded: 4.91 crore) and Marksans Pharma (Shares traded: 4.68 crore) were among the most traded stocks in Thursday’s session.
Stocks showing buying interest
Apollo Hospitals, NBI Industrial Finance, Neuland Laboratories, Orient Refractories,
and Wipro witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Thursday signalling bullish sentiment.
Stocks seeing selling pressure
AKG Exim, KRBL, Shradha Infraprojects, Suvidhaa Infoserve,
and Career Point witnessed strong selling pressure in Thursday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 270 stocks on the BSE 500 index settled the day in green, while 221 settled the day in red.
Podcast: How difficult would it be for Nifty to breach 14,500?
Thursday’s rise in benchmark indices came in despite a weak backdrop of a record Rs 3 lakh daily Covid cases and stricter restrictions in Maharashtra. What lifted sentiment, it seems, was hopes that the lockdown would only be imposed as a last resort in the fight against Covid. Sensex reclaimed the 48,000 mark, while Nifty ended above 14,400 level. The two indices rose 0.8 per cent each for the day. We spoke to Gaurav Garg, Head of Research at CapitalVia Global Research, to share his views on the market.
