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

NEW DELHI: Stock market bulls seem to be in a festive mode ahead of Christmas sending benchmark indices higher for third straight sessions. Though, risks of Omicron and FII selling remain.

Here's how analysts read the market pulse:

Gaurav Ratnaparkhi of Sharekhan said, Nifty50 saw selling pressure around the upper Bollinger Band and the 20-DMA, which was near 17,150. A Doji, he said, suggested exhaustion in the ongoing pullback.


Mazhar Mohammad of Chartviewindia.in said, we can initially expect the strength to continue towards the 17,298 level. Contrary to this, a close below 16,970 should be considered as an initial sign of weakness which can invite bears to dominate for a couple of days. Considering the indecisive formation, it looks prudent to remain neutral on the index.

That said, here’s a look at what some of the key indicators are suggesting for Friday’s action:

S&P 500 hovers near record high
Wall Street's main indexes rose for a third straight session on Thursday after early data suggested the Omicron variant of the coronavirus was less severe than feared, lifting the mood ahead of Christmas break. At 10:13 a.m. ET, the Dow Jones Industrial Average was up 231.77 points, or 0.65 per cent, at 35,985.66, the S&P 500 rose 28.11 points, or 0.60 per cent, at 4,724.67, and the Nasdaq Composite was up 66.38 points, or 0.43 per cent, at 15,588.27.

European shares extend rally
Europe shares rose on Thursday as markets globally rallied after two research studies showed Omicron was less severe compared with the Delta coronavirus variant, lifting investor sentiment. London's blue-chip FTSE 100 index gained 0.43 per cent, extending its two-day rally, while the pan-European STOXX 600 index jumped 1 per cent.

Tech View: Another Doji on charts
Nifty50 on Thursday reclaimed the 17,000 mark but formed an indecisive Doji candle on the daily chart, as the index closed almost where it opened. Analysts said the index needs to sustain above the bullish gap area of 17,015-16,971 to sustain the positive momentum. The bulls are getting exhausted, they said.

F&O: 16,800 crucial
In the derivatives segment, the 16,800 strike price is seeing a lot of activity as it is emerging as strong support. The level saw the highest number of Put reduction during the day, while at the same time also saw a significant number of Call reduction.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Birlasoft, Firstsource Solution, NTPC, IDFC, Coal India and Snowman Logistics.

The MACD is known for signaling 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 RattanIndia Enterprises, Ansal housing, Dixon Tech, Prataap Snacks and Nandan Denim. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Zee Entertainment (Rs 1093 crore), Reliance Industries (Rs 991 crore), Bajaj Finance (Rs 926 crore), Infosys (Rs 762 crore), ICICI Bank (Rs 734 crore) and HDFC Bank (Rs 709 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 the highest trading turnovers in the day.

Most active stocks in volume terms
Suzlon Energy (Shares traded: 14 crore), Vodafone Idea (Shares traded: 11 crore), YES Bank (Shares traded: 7 crore), PNB (Shares traded: 4 crore), GMR Infra (Shares traded: 3 crore) and Zee Entertainment (Shares traded: 3 crore) were among the most traded stocks in the session.

Stocks showing buying interest
MMTC, Firstsource Solution, JB Chemicals, GE Shipping, Dhani Ventures and Sudarshan Chemicals witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
TCI Express, Future Retail, Tata Teleservices, Zee Entertainment and PNB Housing Finance witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on these counters.

Sentiment meter favours bulls
Overall, market breadth was in favour of gainers as 2,194 stocks ended in the green, while 1,122 names settled with cuts.

Podcast: After 17,000, where is Nifty50 headed next?

Barring media and metal sectors, all others saw buying interest. The BSE barometer Sensex gained a little less than 400 points to close above 57,300 levels. Its broader peer Nifty50 added about 120 points and ended the session above the 17,000 mark. Broader markets outperformed the headline peers as BSE midcap and smallcap gained a per cent each. Fear gauge India VIX sharply dropped about 5 per cent and slipped below 16 levels. After 17,000, where is Nifty50 headed next?