Ahead of Market: 12 things that will decide stock action on Thursday

Gaurav Ratnaparkhi of Sharekhan by BNP Paribas said, the index is a stone's throw away from its equality target for the current up move, which is near 12,850.

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Chandan Taparia of Motilal Oswal Financial Services said, the index has to continue to hold above 12,550 zones to witness an up move towards 12,900-13,000 zones, while on the downside, major support exists at 12,430 zones.
NEW DELHI: Nifty ended in the green for the eighth consecutive session on Wednesday, but formed a ‘Hanging Man’ candle on the daily chart.

Chandan Taparia of Motilal Oswal Financial Services said, the index has to continue to hold above 12,550 zones to witness an up move towards 12,900-13,000 zones, while on the downside, major support exists at 12,430 zones.

Vinod Nair of Geojit Financial services said, markets have rapidly reached a premium level with over-optimism supported by easy money, caution is advised in the short-term, as production and distribution-wise, the real benefit will take time.


Gaurav Ratnaparkhi of Sharekhan by BNP Paribas said, the index is a stone's throw away from its equality target for the current up move, which is near 12,850.

"Over there, the index can take a pause for a breather before heading further north. On the flip side, 12,570-12,520 is a near-term support zone to watch out for," he said.

That said, here’s a look at what some of the key indicators are suggesting for Thursday's action:
US stocks rebounds as focus returns to tech stocks
Wall Street's main indexes advanced on Wednesday as signs of a working COVID-19 vaccine raised hopes of a faster-than-expected economic rebound, with technology stocks bouncing back from steep losses this week. The Dow Jones Industrial Average rose 81.21 points or 0.28% to 29,502.13, the S&P 500 gained 23.46 points or 0.66% to 3,568.99 and the Nasdaq Composite gained 171.47 points or 1.48% to 11,725.33.
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European shares extend rally on vaccine cheer
European shares rose for a third straight session on Wednesday as optimism around a COVID-19 vaccine offset concerns about the economic damage from surging coronavirus infections across the continent. The pan-European STOXX 600 gained 0.5%, building on a 5% rally this week as investors bought into utilities as well as travel-related stocks, a sector that has widely underperformed this year.

Tech View: Nifty sends signs of weakness
Nifty50 climbed for the eighth straight session on Wednesday, but in the process formed a ‘Hanging Man’ candle on the daily chart. This was the second straight session, when the index formed such a pattern that has the connotation of the trend reversal if confirmed by selling pressure in the next session. Shrikant Chouhan of Kotak Securities said a Hanging Man pattern is a sign of weakness as such a formation appears at the final stage of an euphoric bounce. “The weakness may get negated if Nifty50 crosses the 12,800 level on Thursday and sustain above it till the end of the first half of Thursday’s session. The index has support at 12,670 and 12,570 levels,” said Chouhan.

Check out the candlestick formations in the latest trading sessions
L29

F&O: VIX sees a sudden spike
India VIX rose 2.10 per cent from 21.57 to 22.03 level due to higher implied volatility in Calls. Volatility has to cool down to extend the momentum to a higher market base. There was Call writing at strike prices 12,700 and 13,000 while Put writing was seen at 12,700 and then 12,600 levels. Options data suggested a wider trading range between 12,400 and 13,000 levels.

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Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Wednesday showed bullish trade setup on the counters of UPL, Aurobindo Pharma, Gati, Biocon, Equitas Holdings, Hero MotoCorp, Hindustan Unilever, Snowman Logistics, Manali Petrochem, Aster DM Healthcare, UltraTech Cement, Bajaj Electricals, Central Depository, Narayana Hrudayalaya, GE Power India, BF Utilities, MEP Infrastructure, Varroc Engineering, Sequent Scientific, Pfizer, IRB Infrastructure, SMS Pharmaceuticals, Munjal Auto, Zensar Technologies, MSTC, Tata Metaliks, Precision Wires, Oswal Agro Mills, Alphageo (India), Smartlink Holdings, Anik Industries and TGB Banquets among others.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Glenmark Pharma, Asian Paints, L&T Infotech, Parag Milk Foods, Borosil Renewables, Nestle India, Centrum Capital, Mahindra CIE Auto, FACT, Prime Focus, Ashiana Housing, Nitin Spinners, Dhunseri Tea, Ganesha Ecosphere, Cera Sanitaryware and D P Wires among others.

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Wednesday’s most active stocks
Bajaj Finance (Rs 5939.51 crore), RIL (Rs 5307.13 crore), IndusInd Bank (Rs 4094.51 crore), Axis Bank (Rs 2996.27 crore), HDFC Bank (Rs 2516.44 crore), SBI (Rs 2508.02 crore), ICICI Bank (Rs 2202.24 crore), Kotak Bank (Rs 1891.81 crore), Bajaj Finserv (Rs 1730.98 crore) and Tata Steel (Rs 1693.16 crore) were among the most active stocks on Dalal Street on Wednesday in value terms.

Wednesday’s most active stocks in volume terms
Vodafone Idea (shares traded: 13.44 crore), SBI (shares traded: 10.71 crore), Tata Motors (shares traded: 7.86 crore), ITC (shares traded: 6.33 crore), YES Bank (shares traded: 5.40 crore), BHEL (shares traded: 5.40 crore), NTPC (shares traded: 5.18 crore), IndusInd Bank (shares traded: 5.16 crore), Axis Bank (shares traded: 5.03 crore) and PNB (shares traded: 4.93 crore) were among the most traded stocks in the session.

Stocks seeing buying interest
Tata Steel (PP), Zydus Wellness, Kotak Bank, Balkrishna Industries and JSW Steel witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Wednesday signalling bullish sentiment.

Stocks seeing selling pressure
Subex, WABCO India, Jump Networks, Laurus Labs and SKIL Infrastructure witnessed strong selling pressure in Wednesday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 288 stocks on the BSE 500 index settled the day in green, while 211 settled the day in red.

Podcast: Will banks continue to drive the market higher? >>>
Benchmark equity indices extended their winning streak for the eighth straight session and logged new highs, driven by strong global markets as vaccine cheer kept investor sentiments upbeat. Sensex climbed 316 points to end the day at 43,594, while Nifty ended at 12,749.15. We spoke to Mayuresh Joshi, Head- Equity Research, William O'Neil India, to understand his views on what lies ahead for the market.
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