Here’s how analysts read the market pulse:
Palak Kothari of Choice Broking said that Nifty50 has immediate support at the 18,200 level while the upside resistance is intact at the 18600-level.
Mazhar Mohammad of Chartviewindia.in said Nifty50 continued its slide which perhaps confirms some sort of corrective downswing is in place with a short-term top around 18,604-level. “This correction brought the index down below the 5-day SMA, hinting at short-term weakness. Unless the index recovers and closes above 18,600-level, strength is unlikely,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Thursday’s action:
S&P 500, Dow near record highs
The S&P 500 and the Dow inched closer to record highs on Wednesday after strong forecasts from healthcare companies Anthem and Abbott, while the Nasdaq lagged as technology stocks took a breather. At 12:02 p.m. ET, the Dow Jones Industrial Average was up 163.79 points, or 0.46 per cent, at 35,621.10, the S&P 500 was up 18.89 points, or 0.42 per cent, at 4,538.52 and the Nasdaq Composite was up 26.24 points, or 0.17 per cent, at 15,155.33.
European stocks hit 6-week highs
European shares closed at six-week highs on Wednesday as strong results from Nestle boosted food company stocks, helping outweigh losses after a clutch of disappointing earnings including luxury group Kering and chipmaker ASML. The pan-European STOXX 600 index ended 0.3 per cent higher, with oil stocks also aiding gains as crude prices recovered slightly.
Tech View: Further weakness seen
Nifty50’s fall below the five-day moving average is concerning for technical analysts who suggested that the index needs to defend the 18,200 points level and recoils to close above the 18,458 points level to enter some sideways consolidation.
F&O: Selling may be limited
Covering of short positions in in-the-money put options of the Nifty50 index alongside buying of out-of-money put options suggested that traders are anticipating more weakness ahead. The index is likely to find support at 18,200 points, which has the highest open positions among put options after the 18,000 strike price.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of CAMS, Manaksia Aluminium, Mangalam Drugs, and P&G Hygiene & Health.
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 GMR Infra, Alok Industries, Indian Oil, Indian Overseas Bank, NBCC, Motherson Sumi, Power Finance, Subex, HUDCO, Apollo Tyres, IFCI, and Deepak Nitrite. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
IRCTC (Rs 9077 crore), Tata Power (Rs 5007 crore), IEX (Rs 2859 crore), Tata Motors (Rs 2685 crore), SBI (Rs 1703 crore), RIL (Rs 1590 crore), Bharti Airtel (Rs 1496 crore), Deepak Nitrite (Rs 1441 crore), L&T Infotech (Rs 1284 crore) and HUL (Rs 1222 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: 41.65 crore), Tata Power (Shares traded: 21.9 crore), PNB (Shares traded: 11.5 crore), YES Bank (Shares traded: 10.05 crore), BHEL (Shares traded: 9.1 crore), Bank of Baroda (Shares traded: 7.7 crore), Trident (Shares traded: 6.3 crore), Union Bank (Shares traded: 5.7 crore), Tata Motors (Shares traded: 5.5 crore) and ITC (Shares traded: 4.8 crore) were among the most traded stocks in the session.
Stocks showing buying interest: CG Power, SBI, L&T Infotech, Tech Mahindra, ICICI Bank and Saregama India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure
Destiny Logistics, Marine Electrics, Quadpro ITeS, and Strides Shashun witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, the market breadth remained in favour of the bears. As many as 89 stocks on the BSE500 index settled the day in the green, while 411 settled the day in the red.
Podcast: Is the market in for a steep correction?
The BSE barometer Sensex gyrated in the range of 775 points during the session. It tanked more than 450 points, but managed to close above 61,260. Its broader peer, Nifty50, was unable to hold 18,300. It settled at 18,266 after declining more than 150 points. The broader markets continued to bleed as BSE midcap and smallcap indices tanked 2 per cent each. Fear gauge India VIX spiked over 5 per cent, breaching 18-level. Is the market in for a steep correction?
