Here’s how analysts read the market pulse:
Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan said that the index faced selling on breaching the 20-hour moving average, but it received some support at the 18,050 level. “Nifty50 is trading near its short-term support, which can either lead to a minor degree bounce or a sideways action,” he said.
Mazhar Mohammad of Chartviewindia.in said Nifty50 appears to have found some support around 18,050 as it entered into the bullish gap zone of 18,050-18,008 levels registered on October 13. “Moreover, it recovered 130 points from intraday low validating the support present in the said gap area,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Friday’s action:
Wall Street slips from record high
The Dow on Thursday eased from a record high hit in the previous session as IBM shares fell after its quarterly report, with the potential impact of supply chain disruptions and labor shortages on profits taking the center stage this earnings season. At 12:00 p.m. ET, the Dow Jones Industrial Average was down 111.47 points, or 0.31 per cent, at 35,497.87, the S&P 500 was down 2.15 points, or 0.05 per cent, at 4,534.04 and the Nasdaq Composite was up 38.84 points, or 0.26 per cent, at 15,160.52.
European stocks recoup most losses
European stocks steadied at six-week highs on Thursday, as buying of defensives and growth stocks helped offset losses in miners and disappointing earnings forecasts, including from software major SAP. After declining as much as 0.6 per cent, the Europe-wide STOXX 600 index ended down 0.1 per cent at 469.71. A European equity strategist at Bank of America had earlier this month set a year-end target of 420 for the STOXX 600, implying a fall of about 10 per cent from current levels.
Tech View: Recovery likely ahead
Analysts said that the Nifty50’s downside appears to be protected at 18,000 points for the time being. They said that the Nifty remains in a strong trend and needs to move above 18,300 points for a rally towards 18,900-18,950 points.
F&O: Range bound movement likely
After a three-day sell-off, positioning in the options of the Nifty50 suggested that traders expect some range-bound movement in coming sessions. Today, traders sold both the out-of-money call and put options of the index.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of IRB Infraprojects, Kotak Mahindra Bank, Ircon, and Varroc Engineering.
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 L&T Finance, NTPC, Tata Motors, IRCTC, NLC India, Jaypee Infratech, HPCL, Future Retail, Karnataka Bank, Angel Broking, IndusInd Bank, and Jain Irrigation. 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 4214 crore), Tata Motors (Rs 2616 crore), RIL (Rs 2541 crore), Kotak Bank (Rs 1996 crore), Tata Power (Rs 1878 crore), TCS (Rs 1727 crore), Infosys (Rs 1552 crore), Asian Paints (Rs 1541 crore), Mindtree (Rs 1448 crore) and IEX (Rs 1408 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
YES Bank (Shares traded: 24.8 crore), Bank of Baroda (Shares traded: 13.1 crore), Vodafone Idea (Shares traded: 12.5 crore), PNB (Shares traded: 12.3 crore), Tata Power (Shares traded: 8.2 crore), BHEL (Shares traded: 8.1 crore), RVNL (Shares traded: 7.2 crore), Union Bank (Shares traded: 6.4 crore), Tata Motors (Shares traded: 5.3 crore) and Federal Bank (Shares traded: 4.7 crore) were among the most traded stocks in the session.
Stocks showing buying interest: IRB Infra, RVNL, IIFL Wealth, Indian Bank, Kotak Bank and Union Bank witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure
Crown Lifters, Dev Information, SREI Infra, and Bhagiradha Chemicals 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 215 stocks on the BSE500 index settled the day in the green, while 285 settled the day in the red.
Podcast: How investors should approach the market now?
The carnage on Dalal Street continued as domestic equity markets extended its losing streak to the consecutive third session. Benchmark indices wiped off the early gains as risk appetite of investors weakened and weaker global cues also dented the sentiments. Over the course of the past three sessions, investors’ notional wealth has eroded by Rs 8.3 lakh crore. Should investors buy these dips or do you see more pain coming?
