Rohit Singre, Senior Technical Analyst at LKP Securities said, “On the hourly chart, it seems index is in V-shaped recovery and if it turns to be true then we may see a current pullback to extend further towards 13,775, which is previous swing high and on other hand, good supports are formed near 13,550-13,460 zone.”
“Market is continuing its rally amidst concerns over new virus strain, lockdown and weak global cues, fueled by IT, mid and smallcaps. The additional stimulus announced in the US did not gain much momentum in the global market as the quantum of the benefit was well-factored, but Europe and EMs are maintaining buoyancy. In the coming days, the market will also focus on Brexit trade deals, which are expected to be finalized soon and fallout in the economy due to strict lockdown,” said Vinod Nair, Head of Research at Geojit Financial services.
That said, here’s a look at what some of the key indicators are suggesting for Thursday’s action:
US stocks rise as weekly jobless claims dip
The S&P 500 and the Dow rose on Wednesday as jobless claims unexpectedly fell last week, while the Nasdaq retreated from a record high close on losses in heavyweight technology stocks. The Dow Jones Industrial Average was up 193.58 points, or 0.64%, at 30,209.09, the S&P 500 was up 16.83 points, or 0.46%, at 3,704.09. The Nasdaq Composite was down 7.66 points, or 0.06%, at 12,800.26.
European shares extend recovery rally
European shares gained for a second day on Wednesday, extending a recovery from a sharp sell-off at the start of the week, following a report that a Brexit trade deal could be struck later in the day. The pan-European STOXX 600 index rose 0.83% in holiday thinned trade, after a 2.3% slump on Monday. London’s FTSE 100, too, gained 0.44%.
Tech View: Nifty eyes 13,730-13,775 level
After a 437-point bounce in Nifty50, the index formed a bullish candle on the daily chart, as it seemed to be staging a V-shape recovery on the hourly chart, implying that the same momentum may continue. “As expected, the index managed to hold Tuesday’s bullish momentum and closed the session on a positive note with gains of one per cent. In the process, the index formed a bullish candle on the daily chart,” said Rohit Singre, Senior Technical Analyst at LKP Securities. “On the hourly chart, it seems the index is seeing a V-shaped recovery. If it turns out to be true, then we can expect the current pullback to extend further towards the 13,775 level, which was the previous swing high. On other hand, good supports are seen near the 13,550-13,460 zone,” Singre said.
Check out the candlestick formations in the latest trading sessions
F&O: Cooldown in volatility suggests bulls in charge
India VIX fell 6.76 per cent from 21.98 to 20.49 levels. A cooldown in volatility from higher levels has given support for a decent bounceback. Now, it has to hold below 19 level to help the bulls continue their grip on the market. There was marginal Call writing at strike prices 14,000 and 13,600, while Put writing was seen at 13,500 and then 13,400 levels. Options data suggested an immediate trading range between 13,200 and 13,750 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Wednesday showed bullish trade setup on the counters of Wipro, Tata Consumer Products, Shree Renuka Sugars, Max Financial Services, Godrej Properties, Tata Elxsi, Zen Technologies, HBL Power Systems, Tilaknagar Industries, eClerx Services, Coforge, Bliss GVS Pharma, Ramky Infrastructure, India Tourism Development Corporation, Gallantt Ispat, Kansai Nerolac Paint, Vesuvius India, Astral Poly Technik, Orient Bell, RS Software (India), Tokyo Plast International, Lakshmi Machines, Balaxi Pharmaceuticals and Univastu India.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Zee Entertainment, Fortis Healthcare, Zee Media, Inox Wind, Welspun India, Arvind SmartSpaces, Energy Development Company, McDowell Holdings, Shreyas Shipping, Manaksia Steels, Dixon Technologies, Hexa Tradex, GeeCee Ventures, Elgi Equipments, Mukand, Weizmann, Shreyans Industries, Coral India Finance, Vardhman Special Steels, Arihant Superstructures, Metalyst Forgings, Alchemist, Nagreeka Exports, CL Educate, Accelya Solutions India, Revathi Equipment, Zenith Exports, Punjab Chemicals and CIL Nova Petrochemicals.
Wednesday’s most active stocks
Infosys (Rs 1978.06 crore), Bajaj Finance (Rs 1749.86 crore), RIL (Rs 1744.32 crore), Wipro (Rs 1704.69 crore), Vedanta (Rs 1072.06 crore), HDFC Bank (Rs 1060.66 crore), IndusInd Bank (Rs 1051.67 crore), HCL Tech (Rs 992.17 crore), ICICI Bank (Rs 963.06 crore) and Tata Motors (Rs 950.33 crore) were among the most active stocks on Dalal Street on Wednesday in value terms.
Wednesday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 61.14 crore), YES Bank (Shares traded: 21.61 crore), PNB (Shares traded: 17.82 crore), RattanIndia Power (Shares traded: 16.89 crore), Vedanta (Shares traded: 7.33 crore), Dish TV India (Shares traded: 7.14 crore), Tata Motors (Shares traded: 5.69 crore), Wipro (Shares traded: 4.49 crore), Indiabull Housing Finance (Shares traded: 3.96 crore) and BHEL (Shares traded: 3.59 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Birlasoft, Mphasis, Rossari Biotech, Tata Elxsi and IndiabullsVentures (PP) witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Wednesday signalling bullish sentiment.
Stocks seeing selling pressure
Majesco, Ravinder Heights, Supreme Engineering, Jump Networks witnessed strong selling pressure in Wednesday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favoured bulls
Overall, market breadth remained in favour of bulls. As many as 450 stocks on the BSE 500 index settled the day in green, while 49 settled the day in red.
Podcast: Are IT stocks in an overheated zone? >>>
Benchmark equity indices resumed their uptrend on Wednesday, helped by the rally in world equities, with IT majors leading the gains. Sensex rose nearly 1 per cent to 46,444 points, while peer Nifty climbed a per cent to 13,601 points. We caught up with Mayuresh Joshi, Head – Equity Research, William O’Neil India, to discuss about the IT stocks rally, and more.
