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

NEW DELHI: Buying continued for the fourth straight session on Wednesday as hopes of a stellar earnings season brought buyers on Dalal Street. Strong global cues also helped the market morale.

Here's how analysts read the market pulse:-

Shrikant Chouhan of Kotak Securities said the index has maintained a breakout continuation formation, but profit-booking at higher levels cannot be ruled out due to the extended rally in recent sessions. The 18,100 level for Nifty50 would be the key to watch out for and above the same the uptrend texture will continue up to 18,275-18,350, he said.


Mazhar Mohammad of Chartviewindia.in said Nifty50 confined its move to 91 points with an indecisive formation that resembled a Spinning Top. Usually such moves with narrow intraday trading ranges make the index vulnerable to sudden falls, he said.

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

US shares off to positive start
Wall Street's main indexes opened higher on Wednesday after consumer prices data that largely met expectations eased some concerns about faster-than-expected interest rate hikes, with big technology stocks leading the advance.

The Dow Jones Industrial Average rose 84.14 points, or 0.23 per cent, at the open to 36,336.16.

The S&P 500 opened higher by 15.52 points, or 0.33 per cent, at 4,728.59, while the Nasdaq Composite gained 109.65 points, or 0.72 per cent, to 15,263.10 at the opening bell.

European shares rise
The pan-European STOXX 600 index rose 0.4 per cent, tracking global stocks, as Powell said the US economy was ready for a tighter monetary policy but it may take several months to make a decision on reducing the Fed's $9 trillion holding.

Tech View: Profit-booking?
Nifty50 on Wednesday rose for the fourth straight day and, in the process, took out its immediate resistance of 18,200 level. The index formed a bullish candle on the daily chart, but the size of the candle body was smaller than the last two sessions. At close, the 14-day RSI too was close to the overbought zone. A profit booking cannot be ruled out, said analysts.

F&O: 18,400 major resistance
As the last eight of nine sessions have seen buying, bulls are doubling down their bets. 18400 strike prices saw massive accumulation of calls for another day, meaning they are the next resistance levels for the index. At the same time, 18,000 is becoming a good base.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Trident, Gati, Anant Raj, Shipping Corporation, United Spirits and PNB Housing Finance.

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 YES Bank, JSW Steel, TV18 Broadcast, Morepen Labs, JSW Ispat and Future Enterprises. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Reliance Industries (Rs 1,712 crore), HDFC Bank (Rs 1,650 crore), TCS (Rs 1,241 crore), Bajaj Finance (Rs 1,136 crore), Vodafone Idea (Rs 1,093 crore), Avenue Supermarts (Rs 1,091 crore) and ICICI Bank (Rs 1,077 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.

Most active stocks in volume terms
Vodafone Idea (Shares traded: 86 crore), Suzlon Energy (Shares traded: 36 crore), YES Bank (Shares traded: 7 crore), Alok Industries (Shares traded: 5 crore), SAIL (Shares traded: 4 crore), and Greaves Cotton (Shares traded: 3 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Sheela Foam, Chambal Fertilisers, Blue Dart, Tata Communication, Adani Green Energy, Suzlon Energy and SRF witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Mas Financial Services, Gillette India and Spandana Sphoorty witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counter.

Sentiment meter favours bulls
Overall, market breadth was in favour of gainers as 1,839 stocks ended in the green, while 1,611 names settled with cuts.

Podcast: Top sectors that may shine this earnings season Bulls continued to dominate Dalal street, driving benchmark indices higher for the fourth straight session. US Fed chair Jerome Powell's lesser hawkish tone eased the worries of traders. Buying also continued as investors believe India Inc will positively surprise in the upcoming earnings season. Metals, realty and auto stocks added the most to gains. However, pharma and select IT plays were under some pressure. Which are the top themes to watch out this earnings season?