Nifty formed a small bearish candle on the daily chart, which resembled an indecisive Spinning Top. Though Nifty crossed the crucial 15,650 level during the day, it failed to hold on to the levels and slipped soon after. Analysts expect this rangebound movement to continue and advised traders to use any dips to take positions. Will the market remain in a consolidative phase for now or will it move higher?
Here’s how analysts read the market pulse:
Mazhar Mohammad of Chartviewindia.in said that his proprietory twin momentum oscillator has generated a sell signal after Tuesday’s price action. He expects the index to remain either sideways or initially move down towards 15,374 in the next couple of sessions. “A critical short term support is placed at 15,374 level, which can act as a trend deciding level,” he said.
Chandan Taparia of Motilal Oswal Securities said that the index will need to hold above 15,500 to witness an up move towards a fresh lifetime high of 15,750. On the downside, support exists at 15,431 and 15,300 levels, he said.
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
Dow Jones rises ahead of macro data
Wall Street’s benchmark Dow Jones and S&P 500 indices rose on Tuesday whereas the tech stocks-heavy Nasdaq Composite gauge declined, ahead of a week packed with major economic data that is expected to shed more light on the path of inflation. The Dow Jones industrial average rose 133.65 points or 0.39 per cent to 34,663.10, and the S&P 500 added 3.27 points or 0.08 per cent to 4,207.38. However, the Nasdaq Composite declined 40.34 points or 0.29 per cent to 13,708.40.
European stocks rise
European shares rose on Tuesday amid broad gains across leading indices, with the STOXX Europe 600 extending gains to trade up 1.1 per cent. The recovery from Covid-19 remains patchy in many parts of the world, with exports reviving but broader economic activity still dampened by measures to contain fresh outbreaks. May euro zone inflation came in higher than expected at 2 per cent, driven by rising energy costs, above the European Central Bank’s target of below but close to 2 per cent.
F&O: Options peg Nifty range at 15,300-15,800
Fear gauge VIX remained supportive, moving up 2.95 per cent from 16.88 to 17.38. The index is near its lowest point in 65 weeks since February 2020 and a falling gauge could extend the bullish market momentum towards new high territory.
Tech View: It may be a while before Nifty50 resumes uptrend
Analysts see rangebound movement ahead for the 50-scrip index. They advised traders to buy into any index fall towards the immediate support of 15,370. Independent analyst Manish Shah said the index may stay rangebound in the 15,470-15,660 over the next two days.
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 Adani Ports & SEZ, Bajaj Finance, Jagsonpal Pharma, Music Broadcast, Alkem Laboratories, Capri Global Capital, Divi’s Dixon Technologies, Ducon Infratech, Repco Home Finance, J Kumar Infraproject, Ganesh Housing, One Point One Solution, Megasoft, Shiva Texyarn, Gandhi Special, Mayur Uniquoters, Beardsell and eClerx Services.
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 Power, Jaiprakash Power, HFCL,
, , NCC, City Union Bank, Zee Media Corp, Snowman Logistics, India Cements, , National Fertilizers, Rail Vikas Nigam, Karur Vysya Bank, Genus Power Infrastructure, Bharat Forge, Navkar Corporation, Gati, Network 18 Media, Bodal Chemicals, Nectar Lifesciences, United Breweries, Panacea Biotec, Fineotex Chemical, BEML, Gokaldas Exports, Shalby, Birla Tyres, Nahar Poly Films, TV Today Network, Venus Remedies, Zuari Agro Chemicals, GMM Pfaudler, NDTV, Khadim India, Neogen Chemicals, Seya Industries, Bharat Gears, Deep Energy Resource, Brooks Laboratories, Force Motors, Albert David Ltd, TCNS Clothing, Sagar Cements, Premier Polyfilm, Kennametal India, Smartlink Holdings, Aaron Industries, Centum Electronics, Wendt India and ABM International. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Tuesday’s most active stocks in value terms
RIL (Rs 2,813.89 crore), SBI (Rs 2,554.69 crore), Tata Steel (Rs 1,945.42 crore), Bajaj Finance (Rs 1,638.60 crore), Adani Ports SEZ (Rs 1,407.19 crore), Adani Enterprises (Rs 1,378.24 crore), SAIL (Rs 1,345.39 crore), Tata Motors (Rs 1,044.60 crore), HDFC (Rs 1,008.89 crore) and JSW Steel (Rs 985.83 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.
Tuesday’s most active stocks in volume terms
PNB (Shares traded: 17.27 crore), SAIL (Shares traded: 11.03 crore), BHEL (Shares traded: 9.63 crore), Vodafone Idea (Shares traded: 9.51 crore), Reliance Power (Shares traded: 8.75 crore), YES Bank (Shares traded: 5.93 crore), SBI (Shares traded: 5.93 crore), Bank of Baroda (Shares traded: 5.91 crore), GTL Infra (Shares traded: 5.49 crore) and Reliance Communication (Shares traded: 5.32 crore) were among the most traded stocks in the session.
Stocks showing buying interest
PNB Housing, Capri Global, Gujarat Fluorochem, Adani Enterprises and JSW Energy 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 and Vikas Lifecare RE witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, the market breadth remained in favour of bears. As many as 157 stocks on the BSE500 index settled the day in the green, while 338 settled the day in the red.
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