Here’s how analysts read the market pulse:
Mazhar Mohammad of Chartviewindia.in said Nifty breaking out of the consolidation phase suggests the index is now eyeing the 16,300 level. “It is critical for Nifty50 to sustain above the 15,900 level, as a breach of the same may result in a false breakout,” he said.
Gaurav Ratnaparkhi of Sharekhan said that the index is headed towards its weekly upper Bollinger Band, i.e. 16,400, which he said will be the short-term target. “Previous resistance of 15,900-16,000 will now act as a crucial short-term support area as per the principle of role reversal,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
Wall Street falls over Delta worries
Wall Street’s main indexes fell on Tuesday, as concerns around a surge in the Delta variant of the coronavirus took the shine off an upbeat corporate earnings season and a pickup in global deals activity. At 10:07 a.m. ET, the Dow Jones Industrial Average was down 0.19 per cent, the S&P 500 was down 0.18 per cent and the Nasdaq Composite was down 0.42 per cent.
European stocks hit record highs
Strong earnings updates from oil major BP, banks, and others drove European stocks to record highs on Tuesday even as concerns lingered over rising Delta variant cases and China’s regulatory moves. After a hesitant start, the region-wide STOXX 600 index rose to an all-time high before closing 0.23% higher.
Tech View: Nifty breakout triggers ‘buy’ signal on MACD
Nifty50 on Tuesday decisively broke above its 15,500-15,900 consolidation range as the index formed a solid bullish candle on the daily chart. The momentum indicator MACD has sent a ‘buy’ signal after a bullish crossover, with analysts expecting it to visit 16,300-16,400 levels in the coming days. MACD is known for signaling trend reversals. When the MACD crosses above the signal line, as was the case on Tuesday, it gives a bullish signal, indicating that the index may see an upward movement.
F&O: Options show shifts in Nifty’s range
India VIX moved up 7.40 per cent from 12.80 to 13.74 level after a decline in the last three sessions. Volatility spiked as Call writers got trapped and huge Call unwinding pressure was seen as it gave a range breakout. On the Options front, maximum Put Open Interest was seen at 15,800 followed by 15,500 strike while maximum Call OI was at 16,000 followed by 15,800 strike.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of
, Tata Motors, Federal Bank, JK Tyre, ONGC, Dabur India, NOCIL, Indian Oil Corp, Hathway Cable, GAIL (India), HDFC, , , Container Corporation of India, Cummins India, Apollo Micro Systems, Strides Pharma, Emami, Den Networks, Escorts, Chambal Fertilisers, L&T, IRCTC, Grasim Industries, Godrej Industries, , Siemens, Kajaria Ceramics, Eicher Motors, Varun Beverages, , CARE Ratings, DM Healthcare, Wockhardt, Sobha, Alkem Laboratories, Heidelberg Cement, Prakash Pipes, Nestle India, Bosch, WABCO India, Cera Sanitaryware, Esab India and GKW.
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 Rain Industries, Vikas Lifecare, Bodal Chemicals, Balaji Telefilms, BSE, IOL Chemicals, Shilpa Medicare, Syngene International, Ujjivan Financial, Tarmat, Arvind SmartSpaces, Windsor Machines, Century Plyboards, Harrisons Malaya, Mastek, Signet Industries,
, Poddar Pigments, Muthoot Capital, Eris Lifesciences, Anjani Portland, Sirca Paints India, Control Print, Themis Medicare, Asian Hotels (East), and The Grob Tea Company. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
SBI (Rs 1,807.85 crore), HDFC (Rs 1,504.45 crore), Adani Ports SEZ (Rs 1,299.22 crore), TCS (Rs 1,242.53 crore), Bharti Airtel (Rs 1,226.77 crore), Tata Steel (Rs 1,214.28 crore), Sun Pharma (Rs 1,165.22 crore), RIL (Rs 1,133.73 crore), Titan Company (Rs 1,091.68 crore) and Tata Motors (Rs 938.26 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.
Most active stocks in volume terms
Vodafone Idea (Shares traded: 83.95 crore), PNB (Shares traded: 10.10 crore), YES Bank (Shares traded: 6.28 crore), Tata Power (Shares traded: 5.05 crore), Zomato (Shares traded: 4.66 crore), Reliance Communication (Shares traded: 4.65 crore), Ashok Leyland (Shares traded: 4.20 crore), SBI (Shares traded: 4.09 crore), SAIL (Shares traded: 4.04 crore) and Bank of Baroda (Shares traded: 3.84 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Suven Pharma, Rossari Biotech, Minda Industries, Ashok Leyland and ABB Power witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
Vodafone Idea and Suryoday Small Finance witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, the market breadth remained in favour of the bulls. As many as 256 stocks on the BSE500 index settled the day in the green, while 242 settled the day in the red.
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After several previous failed attempts, Nifty managed to cross the 16,000 level. Will Nifty conquer new highs now or will it slip below the 16,000-mark? What do the technical charts suggest?
