New Delhi: Market continued to fall for the second straight day as sharp sell-off in metals and financial counters weighed on market sentiments. The index breached the psychologically important 15,000-mark, forming a bearish candle on the daily chart.
Analysts said, Nifty may end up going back to a broad trading range if it doesn’t end up seeing any followup buying. Nifty will need to hold above the 15,000 level to witness any further bounce. Will the market regain the 15,000 level or see pain in the short term?
Here’s how analysts read the market pulse:-
According to Mazhar Mohammad of Chartviewindia.in, Nifty50 appears to have whipsawed its recent breakout registered on May 18, as it gave up all the gains with a close below the bullish gap present in the 15,043-14,938 zone. “On Friday, if Nifty trades below 14,884 level, it should eventually head to its initial targets placed around 14,600 level,” Mohammad said.
Aditya Agarwala, Senior Technical Analyst, YES Securities, said, Nifty managed to hold on to the cluster of key support areas between 14,900-14,850. “Going ahead, if bulls manage to take the index back above 15,000-mark, the uptrend could resume, taking the index to levels of 15,100-15,240,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Friday’s action:
US shares rise after fewer weekly jobless claims
Wall Street’s main indexes rebounded after a three-day slide on Thursday, helped by gains in technology stocks, as the smallest weekly jobless claims since the start of a pandemic-driven recession bolstered risk appetite. At 9:20 p.m. IST, the Dow Jones Industrial Average was up 316.83 points, or 0.93%, at 34,212.15 and the S&P 500 was up 50.25 points, or 1.22%, at 4,165.87. The Nasdaq Composite was up 234.52 points, or 1.76%, at 13,534.24.
Earnings keep European shares buoyant
European stocks rose on Thursday after one of the worst selloffs this year as strong earnings and merger talks in the chip sector helped investors look past inflation worries. At 9:20 p.m. IST, the pan-European STOXX 600 index was up 1.23% after suffering a 1.5% loss in the previous session. Tech stocks gained 1.2% to lead sectoral gains.
F&O: India VIX moves up nearly 2%
India VIX moved up 1.72% from 19.31 to 19.65 levels. The fear gauge needs to hold below 20 levels to extend the bullish market momentum. On the options front, maximum Put Open Interest stood at 14,000 level followed by 14,500 while maximum Call OI was seen at 15,000 level followed by 15,500. Call writing was seen at strike prices 15,000 and 15,500 while there was Put writing at 14,900 and 15,000 levels. Options data suggested a broader trading range between 14,700 and 15,200 levels.
Tech View: Nifty forms bearish candle
Nifty50 formed a bearish candle on the daily scale on Thursday, a day after making a Shooting Star-like reversal pattern. This was the second day the index formed lower highs and lows. Analysts said Nifty recently saw a breakout from its consolidation band, but in absence of followup buying, it may go back to a broad trading range. They also noted that the NSE barometer failed to hold on to its immediate support, which was disappointing. The index needs to hold above 14,880-860 zone to resume the uptrend, they said. “Nifty has faced immediate resistance at the upper band of the Bollinger formation which suggests a bearish move in the near term. Besides, Nifty has confirmed a breakdown of the Shooting Star pattern, also a sign of correction. Adding to that, the Stochastic oscillator showed a negative crossover on the daily chart, indicating some correction for the coming sessions,” said Choice Broking.
Check out the candlestick formations in the latest trading sessions
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Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Tata Motors, DCW, Jump Networks, TV Today Network, Balaji Telefilms, Rico Auto, Greenply Industries, Anant Raj, Unichem Labs, Heidelberg Cement, Arvind SmartSpaces, Mold-Tek Technologies, Surya Roshni, Sterlite Technologies, Uflex, Ceat, Cigniti Technologies, IndiaMART InterMESH, ARSS Infrastructure, Control Print, The Investment Trust, Satin Creditcare, Neogen Chemicals, Dynamatic Techno, Page Industries, V Mart Retail and Welspun Investments.
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 National Aluminium, Hindalco Industries, Vedanta, NMDC, Hindustan Copper, PetronetLNG, JSW Ispat, GNFC, MOIL, Aster DM Healthcare,
, , Camlin Fine Sciences, Sakthi Sugars, KCP Sugar, Mahindra Logistics, Bajaj Finserv, Mawana Sugars, Capri Global Capital, RS Software (India), India Glycols, Trigyn Technology, Avadh Sugar & Energy, CL Educate, Alkyl Amines, Mastek Li, Maan Aluminium, Visa Steel, Sakar Healthcare, Salasar Techno Engineering, Ponni Sugars (Erode), Swaraj Engines, Steel City Securities and Agro Tech Foods. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Thursday’s most active stocks in value terms
Tata Steel (Rs 3,166.98 crore), BHEL (Rs 1,811.25 crore), Tata Motors (Rs 1,677.85 crore), SBI (Rs 1,649.11 crore), Indiabulls Housing Finance (Rs 1,623.53 crore), JSPL (Rs 1,427.77 crore), Axis Bank (Rs 1,337.67 crore), PNB (Rs 1,260.98 crore), Hindalco (Rs 1,188.10 crore) and Cipla (Rs 1,138.47 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.
Thursday’s most active stocks in volume terms
PNB (Shares traded: 33.92 crore), BHEL (Shares traded: 24.10 crore), TV18 Broadcast (Shares traded: 8.44 crore), Indiabulls Housing Finance (Shares traded: 7.88 crore), YES Bank (Shares traded: 7.59 crore), 3i Infotech (Shares traded: 6.83 crore), Vodafone Idea (Shares traded: 6.79 crore), SAIL (Shares traded: 5.99 crore), Bank of Baroda (Shares traded: 5.78 crore) and Indian Oil Corp. (Shares traded: 5.65 crore) were among the most traded stocks in the session.
Stocks showing buying interest
India Cements, HFCL, Poly Medicure, Angel Broking and JK Lakshmi Cement witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
Chaman Lal Setia Exports, DSJ Communications, Proseed India and Sundaram Finance RE witnessed strong selling pressure in Thursday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, the market breadth remained in favour of bulls/ bears. As many as 205 stocks on the BSE 500 index settled the day in the green, while 292 settled the day in the red.
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