Here’s how analysts read the market pulse:
Mazhar Mohammad of Chartviewindia.in said there are neither sell signals nor weaknesses on the price chart and advised traders to lock in their profits by placing a stop loss below the 16,490 level and look for a modest target of 16,700.
Shrikant Chouhan of Kotak Securities said Nifty50 has formed a breakout continuation formation and charts suggest traders may prefer to take some profits near the 16,700 resistance level. “As long as Nifty50 trades above 16,520, the uptrend formation could continue up to 16,675-16,720 levels,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
Tech stocks pull Wall St down
Wall Street’s main indexes fell on Tuesday, weighed down by a decline in mega-cap technology-related stocks and a weak earnings report from Home Depot, while retail sales data showed the pace of the U.S. economic recovery moderated in July. At 9:52 a.m. ET, the Dow Jones Industrial Average was down 299.67 points, or 0.84 per cent, at 35,325.73, the S&P 500 was down 31.57 points, or 0.70 per cent, at 4,448.14, and the Nasdaq Composite was down 135.71 points, or 0.92 per cent, at 14,658.06.
European stocks edge higher
European stocks eked out gains after falling to their lowest in a week on Tuesday, as upbeat euro zone data helped ease worries about a slowdown in global economic growth amid a spike in COVID-19 cases in Asia and elsewhere. The pan-European STOXX 600 was 0.1 per cent higher, after the index marked its longest winning streak in over a decade.
Tech View: Nifty takes out 16,600 level
Nifty50 on Tuesday extended its recent rise to the seventh straight session. The NSE barometer has been defying weakness in the broader market of late and is trading in the overbought territory, but there are no sell signals as of now. As long as the index trades above the 16,500 level, momentum will stay positive, analysts said.
F&O: Positive momentum to stay
The India VIX fell by 0.35 per cent from 13.45 to 13.41 points in today’s trade. Overall, comparative lower volatility indicates that bulls are holding the command and the current momentum could continue. On the option front, maximum open interest in put options of Nifty50 was at 16,500-strike price while maximum open interest in call options was at 16,500-strike price followed by 17,000-strike price.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Aster DM Healthcare, Fortis Healthcare, Apollo Hospitals, Reliance Industries, Delta Corp, NIIT, Zensar Technologies, Arvind Fashions, Triveni Turbine, Vaishali Pharma, Bajaj Finance, FIEM Industries, MindTree, Emami, Tata Elxsi, Hero MotoCorp, Radico Khaitan, Suprajit Engineering, Alankit, Vikas WSP, Shreyas Shipping, ICICI Lombard General Insurance, VST Tillers, Arshiya, HEG, Chalet Hotels, AIA Engineering, Sanofi India, Thermax, TeamLease Service, Precision Wires and Tasty Bite.
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 Tata Power, Trident, Jindal Steel & Power, JSW Steel, Sun Pharma, SBI Cards, B L Kashyap & Sons, Indostar Capital Finance, Kabra Extrusion, Zota Healthcare, DCM Nouvelle, Maheshwari Logistics, Savita Oil Tech, South West Pinnacle, Apollo Pipes, Vadilal Industries, Accuracy Shipping, Williamson Magor, Kingfa Science & Tech and Golden Tobacco. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
Apollo Hospital (Rs 3804.10 crore), Tata Steel (Rs 2872.79 crore), Vedanta (Rs 2574.81 crore), Infosys (Rs 1645.33 crore), TCS (Rs 1527.76 crore), RIL (Rs 1265.99 crore), Tech Mahindra (Rs 1136.54 crore), Bajaj Finance (Rs 1022.42 crore), SBI (Rs 965.49 crore) and HDFC (Rs 762.10 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: 19.72 crore), YES Bank (Shares traded: 10.22 crore), Vedanta (Shares traded: 8.20 crore), JP Power (Shares traded: 5.51 crore), Devyani International (Shares traded: 4.05 crore), SAIL (Shares traded: 3.49 crore), BHEL (Shares traded: 3.07 crore), Suzlon Energy (Shares traded: 2.86 crore), Canara Bank (Shares traded: 2.77 crore) and Bank of Baroda (Shares traded: 2.62 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Apollo Hospital, Krishna Institute of Medical Sciences, Aster DM Health, Tata Elxsi and Max Healthcare witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
YES Bank, Aurobindo Pharma, Biocon and Hero MotoCorp 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 212 stocks on the BSE500 index settled the day in the green, while 285 settled the day in the red.
Podcast: Should you ride the metal rally or get out now?
While the market is looking jittery at its peak, metal stocks have been under pressure. Should one continue to hold them or is it time to exit? Nifty50 saw resistance at 16,600. What are the charts suggesting?
