New Delhi: Sea of green finally enveloped the market on Monday as the bulls roared back on Dalal Street with strong buying seen in financial and metal stocks. The Covid chart of daily cases declining below the 3 lakh-mark for the first time in nearly a month was reason enough to cheer investors, who hoped for a quicker turnaround from the impact of Covid 2.0 in the subsequent quarters.
Nifty snapped the losses of the last three sessions, forming a healthy bullish candle on the daily scale. Analysts said the trend will continue to be sideways unless Nifty50 registers a strong breakout above 15,000 level on a closing basis.
“The price action in the last 50 trading sessions evolved into some sort of a descending channel with valid touch points. As Nifty trades close to the upper boundary of the said channel, a close above 15,000 level can facilitate a sustainable bounce with bigger targets. Nifty50 needs to sustain above 14,725 level to retain its bullish stance,” said Mazhar Mohammad of Chartviewindia.in
Manish Hathiramani, Proprietary Index Trader and Technical Analyst of Deen Dayal Investments, said the market may remain bullish as it has managed to zoom past the 14,850 level. “If the Nifty can keep above 14,850 level, we can claim higher levels of 15,000 and then 15,200. If we break the 14,700 level, the market could fall further to 14,400,” said Hathiramani.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:
US stocks weighed down by inflation jitters
Wall Street’s main indexes slipped on Monday after a sharp recovery late last week, as signs of inflationary pressures building up in the economy kept investors worried about monetary policy tightening. At 9:10 p.m. IST, the Dow Jones Industrial Average was down 171.67 points, or 0.50%, at 34,210.30, the S&P 500 was down 21.19 points, or 0.51%, at 4,152.58, and the Nasdaq Composite was down 97.45 points, or 0.73%, at 13,332.55.
European shares slip into negative territory
European stocks dipped on Monday after staging a sharp recovery late last week, as underwhelming Chinese data and a resurgence of COVID-19 cases in some Asian countries outweighed optimism over the reopening of the British economy. At 9:10 pm, the pan-European STOXX 600 index was down 0.1%, adding to last week’s marginal losses spurred by a US inflation scare.
Tech View: Nifty bounce looks genuine this time
Nifty50 jumped nearly 250 points on Monday and zipped past the 14,900 mark on a closing basis. In the process, the index breached its 50-day and 5-day moving averages. With this, the index has come closer to its immediate resistance range in 15,000-15,050. A decisive breach of the said range can open up the gates for strong gains ahead. The 15,000-15,050 range is a barrier that halted many advances in the past couple of weeks, said independent analyst Mahesh Shah.
Check out the candlestick formations in the latest trading sessions
ETMarkets.com
F&O: India VIX signals bulls ready to charge
India VIX fell 3.27% from 20.26 to 19.60 level. India VIX is at the lowest level of the 2021, as it has recorded the lowest close of last 87 sessions since January 1, 2021. On the options front, maximum Put open interest stood at 14,000 level followed by 13,500, while maximum Call OI was seen at 15,000 level followed by 14,800. There was Call writing at strike prices 15,300 and 15,400 with Call unwinding was seen at 15,000. Put writing was seen at strike prices 14,800 and 14,700. Options data suggested a shift higher in a wider trading range between 14,600 and 15,200 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Monday showed bullish trade setup on the counters of HCL Technologies, Quick Heal Technology, Titan,
, Central Depository, KEC International, Prestige Estates, Panacea Biotec, Emami, Sundaram Fasteners, Cholamandalam Finance, Tanla Platforms, , Chemfab Alkalis, PNC Infratech, Windsor Machines, Saregama India, Anik Industries, , Blue Dart Express, FIEM Industries, Cera Sanitaryware, Future Enterprises, Greenlam Industries, Indostar Capital and TeamLease Service.
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 Wipro, JSW Energy, Marksans Pharma, Balrampur Chini, ICICI Pru Life, Aurobindo Pharma, Network 18 Media, Grasim Industries, Mphasis, Mahanagar Gas, S H Kelkar, Tata Steel Long Prod, Vaibhav Global, Godawari Power, Orient Abrasives, Lasa Supergenerics, Surya Roshni, Jash Engineering, InfoBeans Tech, Mahindra Logistics, Deep Energy Resource, Swelect Energy System, Neogen Chemicals, GeeCee Ventures, Control Print, Jocil and NRB Industrial Bearing. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Monday’s most active stocks in value terms
SBI (Rs 4016.09 crore), Tata Steel (Rs 3246.09 crore), UPL (Rs 2169.49 crore), Tata Motors (Rs 1626.71 crore), L&T (Rs 1339.59 crore), Bajaj Finance (Rs 1306.60 crore), ICICI Bank (Rs 1260.71 crore), Cipla (Rs 1244.18 crore), HDFC (Rs 1096.57 crore) and HDFC Bank (Rs 1074.99 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.
Monday’s most active stocks in volume terms
HFCL (Shares traded: 12.47 crore), BHEL (Shares traded: 11.94 crore), PNB (Shares traded: 10.80 crore), SBI (Shares traded: 10.66 crore), Federal Bank (Shares traded: 9.79 crore), YES Bank (Shares traded: 9.51 crore), SAIL (Shares traded: 8.11 crore), Vodafone Idea (Shares traded: 7.82 crore), Bank of Baroda (Shares traded: 7.30 crore) and JP Power (Shares traded: 6.67 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Balkrishna Industries, Galaxy Surfactants, KPIT Tech, UTI AMC and Birla Corp. witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Monday, signalling bullish sentiment.
Stocks seeing selling pressure
Arcotech, Best Agrolife, GVK Power & Infra,
, Jump Networks, KSS, LCC Infotech, Nitiraj Engineers, STI India witnessed strong selling pressure in Thursday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, the market breadth remained in favour of the bulls. As many as 366 stocks on the BSE 500 index settled the day in the green, while 129 settled the day in the red.
Podcast: Will bank stocks benefit the most if Covid cases continue to drop? >>>
Nifty Bank was the hero on D-Street today as signs of Covid 2.0 appearing to have peaked got the financial counters ticking. Can we see more gains for bank stocks going ahead? Which stocks or sectors could see a strong recovery if cases continue to fall going ahead?
