Ahead of Market: 12 things that will decide stock action on Wednesday
Rohit Singre, Senior Technical Analyst at LKP Securities said, as long as Nifty50 stays above 17,200, one can expect an extension of the current pullback. "If the index fails to hold, we may see some profit-booking towards the 17,100 level,” he said.
By Chiranjivi Chakraborty, ETMarkets.com |
Getty Images
NEW DELHI: Nifty50 formed a small bullish candle on the daily chart on Tuesday as the index managed to close above its 20-day exponential moving average.
Here's how analysts read the market pulse:
Rohit Singre, Senior Technical Analyst at LKP Securities said, as long as Nifty50 stays above 17,200, one can expect an extension of the current pullback. "If the index fails to hold, we may see some profit-booking towards the 17,100 level,” he said.
Mazhar Mohammad of Chartviewindia.in said that clearing of the 20-Day EMA hurdle made him believe that Nifty50 is heading towards its critical resistance point of 17,350 level where the 50-day EMA is present.
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
Wall Street rises for fifth day
The S&P 500 hovered around record highs on Tuesday as conviction in the U.S. economy helped investors shrug off concerns over Omicron-driven travel disruptions and store closures, and extended Wall Street's four-day rally amid thin trading volumes. At 9:44 a.m. ET, the Dow Jones Industrial Average was up 114.24 points, or 0.31 per cent, at 36,416.62, the S&P 500 was up 7.62 points, or 0.16 per cent, at 4,798.81, and the Nasdaq Composite was up 3.97 points, or 0.03 per cent, at 15,875.23.
Defensive stocks prop up European shares
Tech View: More upside possible
With Nifty50 closing above its 20-day EMA analysts were upbeat about the prospects of the index extending its current winning streak. While the short-term trend appears bullish, analysts did not rule out a pause around 17,275-17,300 level.
F&O: Upside capped
In the derivatives segment, traders bought the out-of-money call options of the Nifty50 index suggesting optimism for more gains in the coming session. However, traders were sellers of call options beyond the 17,500 strike price, which could act as a resistance.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of ICICI Bank, NIIT, Pil Italica, Adani Power, NTPC and Hindustan Copper.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Future Retail, NDTV, Max Ventures, Windsor Machines and Tree House Education. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
Most active stocks in volume terms
Vodafone Idea (Shares traded: 18.6 crore), YES Bank (Shares traded: 9.7 crore), RBL Bank (Shares traded: 6.3 crore), GMR Infra (Shares traded: 4.5 crore), PNB (Shares traded: 3.4 crore) and IDFC (Shares traded: 3.3 crore) were among the most traded stocks in the session.
Stocks showing buying interest
NIIT, CE Infosystems, Brightcom Group, Tata Tele, KPIT Tech and Metropolis Health witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure
Mas Fin Services, Lumax Industries, and Jyothy Labs 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 401 stocks ended in the green on the BSE500 index, while 99 names settled with cuts.
Podcast: Will the upward momentum continue till F&O expiry?
The domestic equity market extended its gains from Monday, albeit on low volumes, as most trading desks on Dalal Street remained deserted ahead of the New Year. Investors were able to sidestep concerns around the new Covid variant after the government took steps to improve its arsenal against the virus by approving two new vaccines and a new treatment drug. Benchmark indices managed to build on Monday’s strength, will the upward momentum continue till F&O expiry?
Here's how analysts read the market pulse:
Rohit Singre, Senior Technical Analyst at LKP Securities said, as long as Nifty50 stays above 17,200, one can expect an extension of the current pullback. "If the index fails to hold, we may see some profit-booking towards the 17,100 level,” he said.
Mazhar Mohammad of Chartviewindia.in said that clearing of the 20-Day EMA hurdle made him believe that Nifty50 is heading towards its critical resistance point of 17,350 level where the 50-day EMA is present.
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
Wall Street rises for fifth day
The S&P 500 hovered around record highs on Tuesday as conviction in the U.S. economy helped investors shrug off concerns over Omicron-driven travel disruptions and store closures, and extended Wall Street's four-day rally amid thin trading volumes. At 9:44 a.m. ET, the Dow Jones Industrial Average was up 114.24 points, or 0.31 per cent, at 36,416.62, the S&P 500 was up 7.62 points, or 0.16 per cent, at 4,798.81, and the Nasdaq Composite was up 3.97 points, or 0.03 per cent, at 15,875.23.
Defensive stocks prop up European shares
ADVERTISEMENT
European shares edged up to a five-week high on Tuesday, taking heart from Wall Street hitting record highs in the previous session, even as Omicron worries remained with France tightening curbs and COVID-19 cases surging in Spain and Britain. The pan-European STOXX 600 rose another 0.58 per cent on Tuesday, after adding 0.6 per cent in the previous session to notch a more than one-month high.Tech View: More upside possible
With Nifty50 closing above its 20-day EMA analysts were upbeat about the prospects of the index extending its current winning streak. While the short-term trend appears bullish, analysts did not rule out a pause around 17,275-17,300 level.
F&O: Upside capped
In the derivatives segment, traders bought the out-of-money call options of the Nifty50 index suggesting optimism for more gains in the coming session. However, traders were sellers of call options beyond the 17,500 strike price, which could act as a resistance.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of ICICI Bank, NIIT, Pil Italica, Adani Power, NTPC and Hindustan Copper.
ADVERTISEMENT
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 Future Retail, NDTV, Max Ventures, Windsor Machines and Tree House Education. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
ADVERTISEMENT
ICICI Bank (Rs 1315 crore), Tata Motors (Rs 1094 crore), RBL Bank (Rs 915 crore), IRCTC (Rs 711 crore), RIL (Rs 703 crore) and Tech Mahindra (Rs 651 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
Vodafone Idea (Shares traded: 18.6 crore), YES Bank (Shares traded: 9.7 crore), RBL Bank (Shares traded: 6.3 crore), GMR Infra (Shares traded: 4.5 crore), PNB (Shares traded: 3.4 crore) and IDFC (Shares traded: 3.3 crore) were among the most traded stocks in the session.
Stocks showing buying interest
NIIT, CE Infosystems, Brightcom Group, Tata Tele, KPIT Tech and Metropolis Health witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure
Mas Fin Services, Lumax Industries, and Jyothy Labs 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 401 stocks ended in the green on the BSE500 index, while 99 names settled with cuts.
Podcast: Will the upward momentum continue till F&O expiry?
The domestic equity market extended its gains from Monday, albeit on low volumes, as most trading desks on Dalal Street remained deserted ahead of the New Year. Investors were able to sidestep concerns around the new Covid variant after the government took steps to improve its arsenal against the virus by approving two new vaccines and a new treatment drug. Benchmark indices managed to build on Monday’s strength, will the upward momentum continue till F&O expiry?
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
