Here’s how analysts read the market pulse:
Manish Shah, an independent analyst, said the study of price structure does reveal that the Nifty50 has already broken above a falling trendline from the high at 18,600. This signals a trend continuation. “The weekly expiry in the next two days could be a timid affair. If Nifty50 manages to break out past 18,080, there should be a window of opportunity for a rally to 18,150 as a weekly expiry,” he said.
Mazhar Mohammad of Chartviewindia.in said a fall below that can induce more profit booking, which may eventually lead to the test of 17,836 which seems to be critical short-term support as of now. If it manages to get past 18,112 on Wednesday, strength will resume with an initial target of 18,190 levels.
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
Wall St’s record run loses steam
U.S. stock indexes retreated from record highs on Tuesday as a solid rise in producer prices last month deepened concerns over inflation, while General Electric surged on its plan to split into three public companies. At 9:54 a.m. ET, the Dow Jones Industrial Average was down 109.98 points, or 0.30 per cent, at 36,322.24, the S&P 500 was down 10.15 points, or 0.22 per cent, at 4,691.55 and the Nasdaq Composite was down 54.66 points, or 0.34 per cent, at 15,927.70.
European indices end in the red
European shares ended lower after initially trading near record highs on Tuesday, with strong corporate earnings aiding sentiment, while investors awaited fresh U.S. inflation data for clues on the direction of interest rates. The pan-European STOXX 600 index slipped 0.22 per cent.
Tech View: Analysts stay positive
While the Nifty50 closed lower, analysts took heart from the fact that the index sustained itself above critical moving averages and short-term breakout points. That analysts, believe, will help the index sustain the recent positive run going ahead.
Nifty F&O: Sideways movement likely
In the derivatives segment, traders appeared more circumspect as they sold both out-of-money call and put options of the Nifty50 that indicated they are expecting more rangebound movement from the index in the coming sessions.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Indiabulls Housing Finance, Bharat Electronics, TV18 Broadcast, SH Kelkar, and L&T Finance Holdings.
The MACD is known for signaling 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 Arvind, Sterling and Wilson, HG Infra, Veto Switchgears, and P&G Hygiene. 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 Motors (Rs 2590 crore), Tata Power (Rs 2528 crore), TVS Motor (Rs 1968 crore), RIL (Rs 1815 crore), M&M (Rs 1352 crore), SBI (Rs 1344 crore), HDFC Bank (Rs 1001 crore), Axis Bank (Rs 907 crore), HDFC (Rs 867 crore) and IndusInd Bank (Rs 1068 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: 31 crore), Tata Power (Shares traded: 10 crore), SAIL (Shares traded: 6.2 crore), BHEL (Shares traded: 6.0 crore), PNB (Shares traded: 5.5 crore), Bank of Baroda (Shares traded: 5.4 crore), Tata Motors (Shares traded: 5.0 crore), YES Bank (Shares traded: 4.1 crore), and Union Bank of India (Shares traded: 3.7 crore) were among the most traded stocks in the session.
Stocks showing buying interest: Godrej Industries, Tata Motors DVR, Aditya Birla Retail, Prestige Estates, Tata Tele and Barbeque-Nation witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure
Priti International, Quadpro ITeS, Opto Circuits, and Radha Madhav witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, the market breadth remained in favour of the bulls. As many as 299 stocks on the BSE500 index settled the day in the green, while 201 settled the day in the red.
Podcast: Should you bet on largecaps now?
The BSE barometer Sensex gave up more than 110 points to close at 60,433. Its broader peer Nifty50 could not hold 18,100 for long and finally settled below 18,050. Broader markets ended higher, outperforming the headline peers. BSE Midcap and Smallcap indices ended a per cent up each. Fear gauge India VIX eased over 2 per cent and settled at 16-level. Given the volatility, Should you bet on largecaps in this market?
