Nifty moved in a range of 100 points throughout the session and formed an Inside Bar on the daily chart, suggesting the ongoing consolidation in the market. Analysts said the index is unlikely to move up further unless it crosses the crucial 15,800 level on a closing basis. Will the Nifty cross the crucial 15,800 level this week or will the market see some profit booking?
Here’s how analysts read the market pulse:
Chandan Taparia of Motilal Oswal Securities said a hold above 15,700 level is a must for Nifty to see a further rise towards 15,900 and 16,000 levels. He also sees downside supports at 15,650 and 15,550 levels.
Ruchit Jain of Angel Broking said, a breakout above the 15,800 level would result in the continuation of the uptrend towards 16,000 level. “The support for Nifty50 is placed in the 15,600-15,550 range, while resistance is seen around the 15,800 mark. A breach of the said support will apply brakes to the optimism,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Friday’s action:
Wall Street hits record high as investors shrug off inflation reading
US stocks rose on Thursday, with the S&P 500 hitting a record high, as investors doubted whether a spike in May consumer prices would spur early policy tightening by the Federal Reserve. The Dow Jones Industrial Average rose 230.84 points, or 0.67 per cent, to 34,677.98, and the S&P 500 climbed 27.27 points, or 0.65%, to 4,246.82. The Nasdaq Composite moved 109.64 points, or 0.79 per cent, higher to 14,021.39.
The Labor Department said its consumer price index increased 0.6 per cent last month after surging 0.8 per cent in April. In the 12 months through May, CPI accelerated 5.0 per cent in its biggest year-on-year increase since August 2008. Focus will now be on the Fed’s monetary policy meeting next week for more clues about the central bank’s stance on tapering its massive stimulus.
European shares fall
The pan-regional STOXX Europe 600 index declined 0.3 per cent following gains overnight in Asia, where MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent. The European Central Bank maintained an elevated flow of stimulus as expected on Thursday, fearing that any retreat now would accelerate an already worrisome rise in borrowing costs and choke off the fledgling recovery. It raised its growth and inflation projections for this year and next on Thursday as the euro zone economy started to roar back to life after more than a year of restrictions to curb the coronavirus pandemic.
F&O: OI data pegs Nifty range between 15,500 & 15,900 levels
The index formed an Inside Bar on the daily scale, as it traded inside the trading range of the last session. Now, it has to hold above 15,700 to witness a bounce towards 15,900 and 16,000 levels. On the downside, support exists at 15,650 and 15,550. Volatility gauge India VIX moved up 1.71 per cent from 14.75 to 15. The fear gauge is near its lowest level since February 2020. A falling VIX will continue to make the market favourable for a buy-on-decline strategy.
Tech View: Nifty50 forms Inside Bar, hints at further consolidation ahead
Analysts say strength in the momentum in Nifty50 is unlikely unless the NSE barometer moves above the 15,800 mark. Levels around the 15,650 mark may act as immediate support for the 50-pack, they add. “The gains appear to a part of the consolidation and are unlikely to be a start of a fresh move up. If the swing high of 15,800 is not surpassed, Nifty is likely to form the next leg down, which will bring it towards the swing low of 15,566. So overall, the short-term consolidation is expected to continue,” said Gaurav Ratnaparkhi of Sharekhan.
Check out the candlestick formations in the latest trading sessions
ETMarkets.comStocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Alok Industries, TV18 Broadcast, Union Bank of India, Arvind, Bajaj Finance, Deepak Fertilisers, , Waterbase, Aster DM Healthcare, D-Link (India), Aditya Birla Capital, Ujjivan Financial, Khadim India, HBL Power Systems, Manaksia, Pressman Advertising, SBI Life Insurance, Gujarat Alkali, Godawari Power, , Precision Camshafts, Sarda Energy & Miner, Natco Pharma, Uflex, Mphasis, , Cosmo Films, Godrej Industries, Syngene International, Cybertech System, IndiaMART InterMESH, SKF India, Precot and N K Industries.
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 ITC,
, , Future Enterprises, MTNL, Varun Beverages, Havells India, Can Fin Homes, Praj Industries, Jyothy Labs, GSS Infotech, Siemens, Adani Transmission, Hercules Hoists, AYM Syntex, Signet Industries, Hi-Tech Pipes, GNA Axles, PPAP Automotive, The Byke Hospitality, Tarmat, Emkay Global Financing, KSB, Sharda Motor, Asian Hotels (West), Subros, Bang Overseas, Lumax Industries, Zodiac JRD MKJ and Lakshmi Machines. 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
Bajaj Finance (Rs 3,149.07 crore), Indiabulls Housing Finance (Rs 2,704.36 crore), Tata Power (Rs 1,791.17 crore), RIL (Rs 1,436.82 crore), SBI (Rs 1,174.46 crore), Adani Ports SEZ (Rs 998.63 crore), Adani Power (Rs 906.48 crore), SAIL (Rs 886.85 crore), PNB (Rs 875.55 crore) and Tata Steel (Rs 867.75 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: 20.84 crore), JP Associates (Shares traded: 19.79 crore), Tata Power (Shares traded: 14.04 crore), Vodafone Idea (Shares traded: 14.03 crore), YES Bank (Shares traded: 12.88 crore), Alok Industries (Shares traded: 11.00 crore), Indiabulls Housing Finance (Shares traded: 9.70 crore), TV18 Broadcast (Shares traded: 8.80 crore), Suzlon Energy (Shares traded: 8.05 crore) and SAIL (Shares traded: 6.95 crore) were among the most traded stocks in the session.
Stocks showing buying interest
TV18 Broadcast, Quess Corp, Hatsun Agro, Gujarat Pipavav and Indiabulls Housing Finance 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 DSJ Communications witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter
Overall, the market breadth remained in favour of the bulls. As many as 410 stocks on the BSE500 index settled the day in green, while 89 settled the day in the red.
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The bulls have made a comeback on Dalal Street after a brief consolidation. We asked our expert how should investors position themselves? Also, which sectors appear overvalued and what should investors do at this juncture?
