New Delhi: After showing strong momentum for the past two days, market’s gains slightly fizzled out on Wednesday as Sensex gave up the 50,000-mark. Nifty, however, managed to hold above the crucial 15,000 level after climbing above 15,100 on Tuesday. Selling pressure was seen in financials and telecom stocks, though healthcare and realty scrips showed some positive momentum to arrest a sharp correction.
Nifty traded in a narrow range throughout the session and formed a Shooting Star candle on the daily chart, suggesting a potential trend reversal. According to analysts, while the technical indicators look intact, a short-term correction cannot be ruled out. Will the Nifty slip below the 15,000 level?
Here’s how analysts read the market pulse:-
Independent analyst Manish Shah said Nifty’s support may come in the range of 14,950-15,000. “Nifty50 offers one of the best buying opportunities in the last three months and we should see a rally to the 15,450-15,500 zone before the end of the current F&O series,” said Shah.
Mazhar Mohammad of Chartviewindia.in advised traders to remain neutral on the long side. “Nifty needs to register a close above 15,137 level to tighten their grip on the market. On such a close, hopes of retesting lifetime highs around 15,431 level would rise,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:
US shares fall for third day on inflation jitters
Wall Street’s main indexes fell for the third straight session on Wednesday, as investors dumped riskier assets on fears that rising inflation could force the U.S. Federal Reserve to pare back its support soon. At 09:35 p.m. IST, the Dow Jones Industrial Average was down 338.20 points, or 0.99%, at 33,722.51 and the S&P 500 was down 26.85 points, or 0.88%, at 4,091.37. The Nasdaq Composite was down 98.94 points, or 0.74%, at 13,205.16.
European shares fall on inflation concerns
European stocks headed lower on Wednesday, tracking weakness on Wall Street, as investors grew wary of rising inflationary pressures increasing the odds of an early tightening of monetary policy. At 09:35 p.m. IST, the pan-European STOXX 600 index was down 1.51%, but was trading less than 2% below its all-time high. Miners, travel and technology stocks were the top decliners.
Tech View: Nifty chart hint at buy-on-dips opportunity
Nifty50 on Wednesday formed a Shooting Star candle on the daily chart, which is generally found in an uptrend and suggests a potential trend reversal. Analysts said while technical indicators are positive, a short-term correction cannot be ruled out. They advised investors to ‘buy on dips’. During the day, gains in the index halted near the 78.6 per cent retracement of the February-April decline of 15,160, said Gaurav Ratnaparkhi of Sharekhan. “With this dip, Nifty50 partially filled up a gap in the 15,043-14,938 zone. It has room to completely fill this gap on the downside. Near the lower end of the gap, however, the index is likely to attract fresh buying. So, ‘buy on dips’ is the preferred strategy from a short-term perspective,” he said.
Check out the candlestick formations in the latest trading sessions
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F&O: India VIX moves up marginally
India VIX moved up marginally by 0.40% from 19.24 to 19.31 level. The fear gauge needs to hold below 20 levels to extend the bullish 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. There was Call writing at strike prices 15,100 and 15,300, while Put writing was seen at strike prices 14,900 and 15,000. Options data suggested a shift in the trading range to 14,700-15,300 zones.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Adani Ports & SEZ, Ambuja Cements, Network 18 Media, Jamna Auto, Tech Mahindra, Godrej Properties, OnMobile Global, Kalyani Steel, Century Plyboards, Mangalam Drugs, Deep Energy Resource, The Ramco Cements,
, Newgen Software Tech, Savita Oil Tech, Radico Khaitan, Vinati Organics, Alkali Metals, Kajaria Ceramics, ADF Foods, L&T Technology Services, Shanthi Gears, Vishal Fabrics, Mindteck (India), Apar Industries, JBF Industries, JK Cement, PSP Projects, Cinevista, Future Supply Chain, Seshasayee Paper and Esab India.
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 Tata Steel,
, Glenmark Pharma, Jindal Saw, PI Industries, Prakash Industries, Ester India, IOL Chemicals, Aarti Drugs, Fineotex Chemical, The Andhra Sugars, Cybertech System, Uflex, Goodluck India, Jubilant Pharmova, Ajanta Pharma, Sudarshan Chemicals, Manaksia Steels, Accelya Solutions, Mahamaya Steel Industries, Palash Securities, , Power Mech Projects, Indo National, Eimco Elecon and Nalwa Sons Investments. 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
Tata Motors (Rs 3,776.13 crore), Tata Steel (Rs 2,043.07 crore), SBI (Rs 1,858.33 crore), RIL (Rs 1,504.97 crore), Axis Bank (Rs 1,441.86 crore), UPL (Rs 1,403.68 crore),
(Rs 1,301.98 crore), Bajaj Finance (Rs 1,271.35 crore), Adani Ports SEZ (Rs 1,221.91 crore) and Coforge (Rs 1,148.22 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
PNB (Shares traded: 15.45 crore), Tata Motors (Shares traded: 11.94 crore), BHEL (Shares traded: 10.53 crore), Reliance Power (Shares traded: 10.06 crore), Vodafone Idea (Shares traded: 8.73 crore), YES Bank (Shares traded: 8.70 crore), Indian Oil Corp. (Shares traded: 7.42 crore), 3i Infotech (Shares traded: 6.96 crore), Bank of Baroda (Shares traded: 5.48 crore) and IOB (Shares traded: 5.47 crore) were among the most traded stocks in the session.
Stocks showing buying interest
CSB Bank, Relaxo Footwear, Prince Pipes, Birla Corp. and Gland Pharma witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Wednesday, signalling bullish sentiment.
Stocks seeing selling pressure
Best Agrolife, DSJ Communications, Keerti Knowledge and Skills and Suvidhaa Infoserve witnessed a strong selling pressure in and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, the market breadth remained in favour of bulls. As many as 282 stocks on the BSE500 index settled the day in the green, while 213 settled the day in the red.
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While the Sensex is down 5% since the beginning of this year, the BSE midcap index is up over 18%. What really explains this trend? Where will the market head in the short term? Is the positive momentum still intact?
