Nirali Shah of Samco Securities said traders should remain careful about the fact that Nifty50 is in overbought levels now and potential upside might be limited.
“The immediate support is placed at 11,200. Maintain a bullish outlook on the index, as long as the said support is not violated,” she said.
Nagaraj Shetti of HDFC Securities said Nifty’s near-term trend remains positive. “A sustainable move next week is likely to pull the index towards the next upside target of 12,000 and higher. Formation of any significant reversal pattern at the highs is expected to trigger profit booking,” he said.
Chandan Taparia of Motilal Oswal Financial Services said the index has to hold above 11,500 level to witness an upmove towards 11,750 and then 12,000 levels, while on the downside medium-term support shifts to 11,400-11,350 zone.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:
US stocks upbeat, Dow in positive for 2020
S&P 500 closed up 0.67% for its seventh straight positive day on Friday to hit a new record close, its 20th of the year and the first ever above 3,500. For the week, S&P500 closed up 3.26%, marking its best week since July 2, and fifth straight week of gains for the first time this year. For the month, S&P500 is up 7.24% on pace for its best month since April. Nasdaq closed up 0.6% for its sixth positive day in seven at a new record close, its 40th of the year. The Dow closed up 0.57% for its sixth positive day in seven. For the week, it added 2.59% for its third positive week in four, and is now in positive territory for the year.
European shares shed weight
European stocks closed lower on Friday as investors digested a major policy shift by the US Federal Reserve and news that Japanese Prime Minister Shinzo Abe is resigning because of health concerns. The pan-European Stoxx 600 provisionally closed down by 0.4%, with most sectors trading in negative territory. FTSE shed 0.61 per cent, DAX 0.48 per cent and CAC 0.26 per cent.
Tech View: Nifty climbs for 6th session
Nifty50 on Friday climbed for the sixth straight session and topped the 11,650 level. It formed a bullish candle on the daily chart and continued to form higher highs and lows, suggesting supports are gradually shifting higher. Analysts said the momentum remains strong, but the possibility of a profit booking move has risen.
F&O: Nifty range now at 11,200-12,000
India VIX fell 2.92 per cent at 18.34 level. Volatility is gradually cooling down on a week-on-week basis, which suggests bullish stance and the buy-on-decline strategy could continue in the market. Options data suggested a shift in higher positional trading range between 11,200 and 12,000 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Sun Pharma, UPL, PC Jeweller, Piramal Enterprises, Godrej Properties, BSE, Quess Corp, Spandana Sphoorty Finance, Prajay Engineers, InfoBeans Tech, Panache Digilife and Balaxi Ventures, among others.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Steel Authority, Hindalco Industries, Meghmani Organics, Eicher Motors, Rashtriya Chemicals, Phillips Carbon, Hexaware Technologies, Berger Paints, Cupid, Prakash Industries, Kansai Nerolac Paint, Sunflag Iron, Kopran, Dalmia Bharat Sugar, Orient Cement, Sonata Software, Shalby, Godrej Agrovet, KIOCL, Star Cement, Elgi Equipments, PG Electroplast, Sanghvi Movers, Hercules Hoists, Bosch, Accelya Solutions, Jocil, M Forgings, Grindwell Norton, Damodar Industries, Sagardeep Alloys, Allsec Technologies, Dhunseri Investments and Zenith Exports, among others
Friday’s most active stocks
IndusInd Bank (Rs 3563.21 crore) , ICICI Bank (Rs 3394.05 crore) , Axis Bank (Rs 2968.80 crore) , RIL (Rs 2655.49 crore) , HDFC Bank (Rs 2149.77 crore) , SBI (Rs 2130.47 crore) , Sun Pharma (Rs 1596.94 crore) , Bajaj Finance (Rs 1551.76 crore) , Kotak Bank (Rs 1532.46 crore) and Bandhan Bank (Rs 1380.61 crore) were among the most active stocks on Dalal Street on Friday in value terms.
Friday’s most active stocks in volume terms
Vodafone Idea (shares traded: 128.60 crore) , YES Bank (shares traded: 27.26 crore) , BHEL (shares traded: 13.36 crore) , Federal Bank (shares traded: 13.11 crore) , GMR Infra (shares traded: 11.73 crore) , Bank of Baroda (shares traded: 10.16 crore) , SBI (shares traded: 9.60 crore) , Tata Motors (shares traded: 9.51 crore) , SAIL (shares traded: 9.42 crore) and PNB (shares traded: 8.58 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Sun Pharma, SBI Card, Central Depository Services (India), Coromandel International and Larsen & Toubro Infotech witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday signalling bullish sentiment.
Stocks seeing selling pressure
Max India and Minda Industries – Rights Entitlement witnessed strong selling pressure in Friday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, market breadth remained in favour of bears. As many as 207 stocks on the BSE 500 index settled the day in green, while 289 settled the day in red.
Podcast: Can the bank stocks rally sustain?
Stock market bulls managed an impressive comeback last week from after what looked like am end of the bull run during the week before. A lot of macro data points await us in the week ahead, and that will decide the way forward for the market. So, what awaits us on the macro front, what the Fed police tweak means for emerging markets like India and if the bank rally can sustain at a time when the EMI moratorium is coming to an end. Listen in.