Here’s how analysts read the market pulse:
“Nifty slipped lower as it experienced a consolidation breakdown in the lower timeframe. The sentiment appears somewhat negative for the short term. However, there is observed support at 22,500 on a closing basis. As long as it maintains above 22,500 on a closing basis, we do not anticipate a significant correction in the market. Sustained trading above 22,500 could potentially push the index towards 22,650-22,700 once more. Conversely, a drop below 22,500 might initiate a correction of 200-250 points on the downside.” Rupak De of LKP Securities.
Tejas Shah, Technical Research at JM Financial & BlinkX, said, “The candlestick (Long-legged Doji – Bearish) pattern formed on the weekly chart is not an encouraging one. So we need to wait and watch, till the high (22,776) or low (22,503) of the weekly candle is taken out for further direction on Nifty in Monday’s trading session.”
“Overall, it would be interesting to see whether follow-up selling occurs today or not,” he added.
That said, here’s a look at what some key indicators are suggesting for Monday’s action:
US market
US stocks tumbled Friday following a mixed start to the earnings reporting season. Worries about potentially escalating tensions in the Middle East rattled financial markets, pushing investors to look for safer places for their money.The S&P 500 sank 1.5% to close out its worst week since October, when a huge rally on Wall Street began. The Dow Jones Industrial Average dropped 475 points, or 1.2%, and the Nasdaq composite fell 1.6% from its record set the day before.
European shares
European shares were flat on Friday after hitting a one-week high in early trade, as rising tensions in the Middle East eroded some of the continued optimism around the European Central Bank’s hint of imminent rate cuts.The pan-European STOXX 600 ended the session 0.1% higher, after rising as much as 1.2% during the day, but logging its second straight weekly decline.
Tech View: Doji candle
Nifty on Friday ended 234 points lower to form a Doji candle on the weekly scale. On the daily charts, the index closed below the lows of the previous three sessions, indicating weakness.The index is in the process of retracing the rise it has witnessed from 22,710 – 22,776. The next crucial support level stands at 22,370. On the upside 22,620 – 22,650 shall act as an immediate hurdle from a short-term perspective, said Jatin Gedia of Sharekhan.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Archean Chemical, Vinati Organics, Tata Consumer, Bata India, TCS, and Medplus Health Services, among others.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 signaling weakness ahead
The MACD showed bearish signs on the counters of Natco Pharma, Ingersoll-Rand (India), Granules India, MRPL, Union Bank of India, and Tata Communications among others. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.
Most active stocks in value terms
HDFC Bank (Rs 1,518 crore), RIL (Rs 2,934 crore), Axis Bank (Rs 1,073 crore), Infosys (Rs 1,484 crore), TCS (Rs 4,001 crore), ICICI Bank (Rs 1,104 crore), and Sun Pharma (Rs 1,540 crore), among others, were among the most active stocks on NSE 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
Tata Steel (Shares traded: 5.5 crore), NTPC (Shares traded: 3.1 crore), ONGC (Shares traded: 2.1 crore), HDFC Bank (Shares traded: 2.1 crore), ITC (Shares traded: 1.8 crore), Axis Bank (Shares traded: 1.8 crore), and Power Grid (Shares traded: 1.7 crore), among others, were among the most traded stocks in the session on NSE.
Stocks showing buying interest
Shares of Hindustan Zinc, Quess Corp, Nuvama Wealth Management, KEI Industries, Exide Industries, Aegis Logistics, and IRCTC, among others, witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure
Shares of HUL and Dabur India hit their 52-week lows, signaling bearish sentiment on the counters.
Sentiment meter favours bears
Overall, market breadth favoured bears as 2,373 stocks ended in the red, while 1,466 names settled in the green.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
