Here’s how analysts read the market pulse:
Mazhar Mohammad of Chartviewindia.in said unless Nifty50 bridges Friday’s bearish gap zone of 16,509-16,535 level, the trajectory of the market shall remain on the downside. “If the bulls fail to defend 16,376 level, weakness will initially get extended towards the zone of 16,200-16,162 range,” he said.
Gaurav Ratnaparkhi of Sharekhan said, 16,350 is a key short-term support to watch out for, where the index can form a base for itself. “The overall structure shows that this is a short-term consolidation, which can take place near 16,350-16,700 over the next few sessions,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:
US shares rally as Fed jitters wane
Wall Street rallied to close sharply higher on Friday, closing a tumultuous week on easing concerns over whether the U.S. Federal Reserve could begin tightening its dovish monetary policy sooner than expected. The Dow Jones Industrial Average rose 225.96 points, or 0.65 per cent, to 35,120.08, the S&P 500 gained 35.87 points, or 0.81 per cent, to 4,441.67 and the Nasdaq Composite added 172.88 points, or 1.19 per cent, to 14,714.66.
European shares log worst week in 6 months
European shares edged higher on Friday as Marks & Spencer lifted retailers, but the benchmark STOXX 600 still marked its worst week since February on signs of slowing economic growth and rising COVID-19 cases. The pan-European STOXX 600 index was up 0.3 per cent, with the retail sector gaining 1.2 per cent.
Tech View: Nifty bears strengthen grip
Nifty50’s follow-up selling on Friday after the formation of a reversal candle ‘Dark Cloud Cover’ in the previous session suggests the bears are strengthening their grip on the market. Friday saw the NSE barometer with a gap-down start, negating its higher high-low formation after five sessions.
F&O: Sudden spurt in VIX a cause of concern
India VIX moved up by 8.64 per cent from 12.90 to 14.01 levels. A sudden spurt in volatility has caused profit booking declines in the market. VIX is at its highest daily close of the last 39 trading sessions, which indicates some volatile cues could be seen in the market. The options data suggested a broader trading range between 16,200 and 16,700 levels, while an immediate trading range was seen between 16,300 and 16,600 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of
, Asian Paints, Godrej Consumer Products, Hindustan Aeronautic, Accuracy Shipping, CreditAccess Grameen and VST Industries.
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 Steel, Kotak Mahindra Bank, Adani Enterprises,
, Usha Martin, Sun Pharma Advanced Research, Laurus Labs, Aarti Industries, JK Tyre & Industries, Zensar Technologies, Escorts, , PVR, Indoco Remedies, Info Edge (India), DCM Shriram, RPG Life Sciences, Pokarna, Albert David, Rama Steel Tubes, Sanofi India, Touchwood Entertainment, Bigbloc Construction, Kalyani Investment and Khandwala Securities. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
Tata Steel (Rs 3861.81 crore), CarTrade Tech (Rs 1802.55 crore), HUL (Rs 1488.19 crore), Bajaj Finance (Rs 1435.50 crore), MindTree (Rs 1366.00 crore), Asian Paints (Rs 1209.32 crore), Apollo Hospital (Rs 1119.92 crore), HDFC (Rs 1084.54 crore),
(Rs 1076.41 crore) and SBI (Rs 1049.90 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 the highest trading turnovers in the day.
Most active stocks in volume terms
Vodafone Idea (Shares traded: 30.94 crore), YES Bank (Shares traded: 7.45 crore), SAIL (Shares traded: 6.66 crore), Zomato (Shares traded: 5.38 crore), IDFC First Bank (Shares traded: 4.86 crore), JP Power (Shares traded: 4.66 crore), Ujjivan SFB (Shares traded: 4.44 crore), PNB (Shares traded: 3.88 crore), Bank of Baroda (Shares traded: 3.71 crore) and Suzlon Energy (Shares traded: 3.66 crore) were among the most traded stocks in the session.
Stocks showing buying interest
HUL, Britannia, MindTree, Fortis Healthcare and
India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
CarTrade Tech, Aurobindo Pharma, Biocon, Alembic Pharma 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 70 stocks on the BSE500 index settled the day in the green, while 426 settled the day in the red.
Podcast: Will D-Street see more pain?
Domestic equity indices saw heavy selling on Friday as investors suffered losses of Rs 2.75 lakh crore. Will D-Street investors see more pain in the coming days? Will Nifty slip below 16,400? What are the technical charts suggesting?
