Nifty moved in a narrow range of 85 points throughout the session and formed a Doji candle on the daily chart, suggesting indecisiveness among traders. Analysts said the index may move sideways in the week ahead.
Here’s how analysts read the market pulse:
Shrikant Chouhan of Kotak Securities, said, investors need to change the strategy of buying on minor supports to buying only on large supports. “Try buying the index in the 15,550-15,450 range. Our advice would be to take profit or reduce long positions between 15,950 and 16,050 levels,” he said.
Rohit Singre of LKP Securities, said that a Doji candle pattern represents indecision in the market. “The 15,840 level would act as the immediate hurdle for Nifty50. If it is breached and sustained, an extension of gains towards the 16,000 mark will be possible,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Friday’s action:
US shares eke out gains to close languid week
The S&P 500 closed nominally higher at the end of a torpid week marked with few market-moving catalysts and persistent concerns over whether current inflation spikes could linger and cause the US Federal Reserve to tighten its dovish policy sooner than expected. The Dow Jones Industrial Average rose 14.41 points, or 0.04 per cent, to 34,480.65, the S&P 500 gained 8.29 points, or 0.20 per cent, to 4,247.47 and the Nasdaq Composite added 49.09 points, or 0.35 per cent, to 14,069.42.
European shares hit record high
European stocks scaled a record high on Friday, buoyed by hopes that major central banks will remain accommodative despite signs of rising inflation, while a rally in miners boosted UK shares. The pan-European STOXX 600 index rose 0.7 per cent in its sixth straight session of gains and ended the week 1.1 per cent higher, its best weekly performance since early May.
F&O: Falling VIX sending out good vibes
India VIX fell 5.98 per cent from 15 to 14.10 levels. India VIX is gradually falling near its lowest level of the last 17 months since February 2020. A falling VIX may continue to keep the market favourable for a buy-on-decline strategy. On the options front, maximum Put Open Interest was seen at 15,000 level followed by 15,500 while maximum Call OI was seen at 16,000 followed by 16,100 levels. Call writing was seen at strike prices 15,800 and 16,100 while there was Put writing at 15,500 and then 15709 levels. Options data suggested an immediate trading range between 15,500 and 16,000 levels.
Tech View: Nifty likely to see sideways movement ahead
Nifty50 on Friday formed a Doji candle on the daily chart, suggesting indecisiveness among traders. On the weekly scale, the index formed an indecisive candle, even as it continued to form higher highs and lows for the fifth straight week. Analysts said the index may move sideways next week. They see the 15,840 level as immediate resistance for Nifty50, and expect the 15,550-700 range to offer some support to the index. Mazhar Mohammad of Chartviewindia.in said, “Certain technical oscillators on the weekly charts appear to be overheated, with the daily RSI registering a possible negative divergence, as it failed to get past the previous top, unlike the price chart. We see sideways consolidation next week with a negative bias.”
Check out the candlestick formations in the latest trading sessions:
ETMarkets.com
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of NBCC (India), NCC, Jindal Steel & Power, Centrum Capital, DCB Bank, Jindal Stainless, Sakuma Exports, Glenmark Pharma, Hindustan Zinc,
, Jindal Stainless, Birla Cable, Indian Energy Exchange, Caplin Point Lab, , Datamatics Global Services, Sharda Cropchem, Panama Petrochem, ICICI Lombard General, RPG Life Sciences, Jindal Worldwide, Satin Creditcare, , Manaksia Coated Metal, Tata Elxsi, Kothari Products, Albert David, Cambridge Technology, Lumax Industries, Expleo Solutions and Akash Infra-Projects.
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 Gayatri Projects, PTC India Financial, Bank of India,
, Dewan Housing, Lemon Tree Hotels, Container Corporation, SBI Life Insurance, Mahindra Holidays, Kalpataru Power, UFO Moviez India, PNC Infratech, Shreyas Shipping, Oriental Hotels, HG Infra Engineering, Venky’s (India), MCX, JK Cement, Dhunseri Ventures, GFL, Emami Realty, Seshasayee Paper, Menon Bearings, Monte Carlo Fashions, Aarvi Encon, Onward Technology, Mittal Life Style, Jocil, FIEM Industries, Somany Ceramics, Mangalam Timber, , Agri-Tech (India), ARSS Infrastructure, TTK Healthcare, Advani Hotels, Summit Securities, TCI Developers, Asian Hotels (East) and Welspun Investments. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Friday’s most active stocks in value terms
SAIL (Rs 2,423.45 crore), Bajaj Finance (Rs 2,277.18 crore), Tata Steel (Rs 1,987.03 crore), Adani Ports SEZ (Rs 1,459.71 crore), Indiabulls Housing Finance (Rs 1,422.54 crore), RIL (Rs 1,406.38 crore), Tata Motors (Rs 1,273.61 crore), SBI (Rs 1,153.85 crore), TCS (Rs 1,128.92 crore) and Coal India (Rs 1,004.51 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.
Friday’s most active stocks in volume terms
JP Power (Shares traded: 42.62 crore), SAIL (Shares traded: 18.27 crore), JP Associates (Shares traded: 17.69 crore), Alok Industries (Shares traded: 17.20 crore), Vodafone Idea (Shares traded: 16.15 crore), NBCC (Shares traded: 15.03 crore), Future Consumer (Shares traded: 14.48 crore), YES Bank (Shares traded: 13.55 crore), PNB (Shares traded: 9.14 crore) and GTL Infra (Shares traded: 8.98 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Aegis Logistics, Arvind, Bajaj Finance, Cipla, HCL Infosystems, RIL (PP), NBCC, Thyrocare Technology, ICICI Securities, Lux Industries and Mastek witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday signalling bullish sentiment.
Stocks seeing selling pressure
Anmol India and Inox Wind Energy witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, the market breadth remained in favour of the bears. As many as 231 stocks on the BSE500 index settled the day in green, while 264 settled the day in the red.
Podcast: Which factors are powering the D-Street rally now?
Bulls continue to dominate the market now with both benchmark indices hitting record closing highs. What is driving this stellar rally? Will the market see some consolidation going ahead? How will the bank stocks perform? Are IT stocks still an attractive bet?
