Nifty moved in a range of 138 points and formed a bearish candle on the daily chart. Analysts said the index may revisit 15,600 levels in the coming days amid prevailing weakness. Will the market see more profit booking going ahead?
Here’s how analysts read the market pulse:-
Mazhar Mohammad of Chartviewindia.in, said, failure to defend Wednesday’s low of 15,742 may drag Nifty50 towards 15,600. “As the market is sloshed with liquidity and awaiting the US Fed’s policy outcome, defending the 15,742 level may push the index towards 16,000 levels,” he said.
Gaurav Ratnaparkhi of Sharekhan said Nifty had reached the upper end of a rising channel on the hourly scale from where selling emerged. “The bulls are expected to initiate a fresh round of buying near the 15,720-15,700 zone. The initial short-term target on the upside continues to be at 16,000,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Thursday’s action:
US shares drift below record highs
The S&P 500 and the Nasdaq drifted just below record highs on Wednesday, with investors on edge before potential hints from the Federal Reserve on when it would taper its massive monetary stimulus. At 9:15 p.m. IST, the Dow Jones Industrial Average was down 19.55 points, or 0.05%, at 34,279.68 and the S&P 500 was down 0.57 points, or 0.13%, at 4,246.02. The Nasdaq Composite was up 23.27 points, or 0.17%, at 14,096.64.
European shares rise to near record high
Gains in financial and industrial stocks lifted European shares on Wednesday, though the main equity index held off record highs on nervousness that the U.S. Federal Reserve could flag later in the day when it plans to start unwinding its stimulus. The pan-European STOXX 600 was up 0.27% by 09:45 p.m. IST. If gains hold until the end of the day, the index will mark its longest gaining streak in three-and-a-half years.
F&O: bounce in VIX signals volatile times ahead
India VIX moved up 1.82% from 14.60 to 14.86 level. The fear gauge was gradually falling for the last six consecutive weeks and had come to the February 2020 level before seeing this spike. Lower volatility indicates an overall bullish market bias, but a small bounce in VIX can give some volatile cues to the market. On the options front, maximum Put Open Interest stood at 15,500 level followed by 15,000 while maximum Call OI was seen at 16,000 followed by 16,500 level. There was minor Call writing at strike prices 15,800 and 15,900 while minor Put writing was seen at 15,600 and then 15,400 levels. Options data suggested an immediate trading range between 15,600 and 16,000 levels.
Tech View: Nifty sends sell signal on MACD
Nifty50 snapped a four-day winning streak on Wednesday and formed a bearish candle on the daily scale after forming three indecisive candles. Analysts said the chances of the index revisiting the 15,600 level – the lower end of the ongoing consolidation range – are good. The 15,700 level may offer some support, they said. The index has sent out a ‘sell’ signal on the MACD indicator, said independent analyst Manish Shah. “A minor trendline from May’s low has also been violated, which suggests Nifty50 is getting ready for a drop to 15,600-15,650 levels over the next couple of days. We expect the index to stay below 15,800 level at the weekly expiry on Thursday,” Shah said.
Check out the candlestick formations in the latest trading sessions
ETMarkets.com
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of FACT, PTC India Financial, GE T&D India, Usha Martin, Cineline India, BASF India, NCL Industries, Surya Roshni, Mastek, Umang Dairies, WABCO India, Vinyl Chemicals, Nestle India, Saksoft, Xpro India and Naga Dhunseri Group.
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 Bank of Baroda, Ashok Leyland, TV18 Broadcast,
, Himadri Speciality, RBL Bank, McLeod Russel, , Cipla, , Welspun Corp, Delta Corp, Nippon Life AMC, Grasim Industries, InterGlobe Aviation, Ashiana Housing, V-Guard, PNB Housing Finance, Ujjivan Financial, MOIL, SBI Cards and Pay, EIH, Titagarh Wagons, Dixon Technologies, GSS Infotech, , GP Petroleums, Cholamandalam Finance, JBM Auto, TVS Srichakra, Wendt India and GKW. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Wednesday’s most active stocks in value terms
Adani Ports SEZ (Rs 2,140.82 crore), Tata Steel (Rs 2,016.43 crore), Adani Enterprises (Rs 1,886.62 crore), Indiabulls Housing Finance (Rs 1,619.77 crore), Infosys (Rs 1132.74 crore), Just Dial (Rs 1129.21 crore), RIL (Rs 1108.10 crore), Tata Power (Rs 1048.06 crore), Jubilant Food (Rs 995.01 crore) and Tata Motors (Rs 968.40 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 highest trading turnovers in the day.
Wednesday’s most active stocks in volume terms
JP Power (Shares traded: 19.74 crore), Vodafone Idea (Shares traded: 14.71 crore),
(Shares traded: 11.01 crore), South Indian Bank (Shares traded: 9.63 crore), Future Consumer (Shares traded: 9.17 crore), Tata Power (Shares traded: 8.44 crore), GMR Infra (Shares traded: 8.24 crore), YES Bank (Shares traded: 7.79 crore), BHEL (Shares traded: 7.63 crore) and SAIL (Shares traded: 7.09 crore) were among the most traded stocks in the session.
Stocks showing buying interest
FACT, BASF India, JSW Energy, Chambal Fertilisers and WABCO India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
Anmol India and Vikas EcoTech RE 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 128 stocks on the BSE500 index settled the day in the green, while 369 settled the day in the red.
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