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

NEW DELHI: As Nifty ended above the 11,400 level on Thursday, it formed a bullish candle on the daily chart.

“Meanwhile, to retain a bullish stance, it remains critical for the bulls to sustain above 11,295 levels on the downside as a close below the said support can resume the downswing by signalling the end of a pullback swing. Therefore, positional traders can buy the dip in the zone of 11,360 – 11,340 levels for a possible target of 11,590 with a stop below 11,290 levels,” he said.

Vinod Nair of Geojit Financial Services said the rising cases of infections, seemingly high valuations and geopolitical tensions are still causes of worry for the market. “Next week’s cues will again mainly depend on how global markets close this week,” he said.

Nirali Shah of Samco Securities said the immediate support and resistance for Nifty are now placed at 11,180 and 11,540, respectively. “Traders should wait for a decline before building long positions,” said Shah.

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

US stocks close lower
US stocks closed lower on Friday as news that US President Donald Trump tested positive for COVID-19 put investors in a risk-off mood and added to mounting uncertainties surrounding the election. The Dow Jones Industrial Average fell 134.09 points, or 0.48 per cent, to 27,682.81 while the S&P 500 lost 32.36 points, or 0.96 per cent, to 3,348.44.

European stocks end higher
European stocks closed slightly higher on Friday, as investors pinned hopes on more US stimulus after data showed job growth slowed more than expected in September in the world’s largest economy. The pan-European STOXX 600 rose 0.3 per cent, capping another volatile week which started with a bout of bargain hunting in beaten-down sectors that helped the benchmark record a 2 per cent weekly gain.

Tech View: Nifty takes out 11,300-11,350 range in style
After two days of consolidation, Nifty50 took out the key resistance range of 11,300-350 on Thursday to close above the 11,400 level. The index formed a bullish candle on the daily chart and a Bullish Harami pattern on the weekly scale. Analysts said further upside in the index looks likely.

F&O: Nifty set for further rise
The overall structure of the index remains positive for a ‘buy on decline’ strategy as supports are gradually shifting higher. Now, it has to hold above 11,333 level to witness a further rise towards 11,500 and then 11,600 levels, while on the downside, major supports were seen at 11,200 level. India VIX fell 6.04 per cent from 19.53 to 18.35 levels. The overall lower volatility is giving comfort about a fresh up move in the market.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Thursday showed bullish trade setup on the counters of Axis Bank, L&T Finance Holdings, Hindalco Industries, M&M Finance, PVR, HDFC Bank, Sun Pharma, STF, GSFC, Adani Ports, Titan Company, Tata Consultancy Services, Grasim Industries, Hindustan Unilever, Piramal Enterprises, Delta Corp, Marksans Pharma, Lemon Tree Hotels, Precision Wires, UFO Moviez India, Bajaj Finserv, Bata India, Network 18 Media, Bajaj Electricals, KEC International, Nitin Spinners, Autoline Industries, Zodiac Clothing, Esab India, Emami Paper Mill and Kuantum Papers, among others.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of HCL Technologies, Meghmani Organics, Majesco, Hexaware Technologies, J B Chemicals, Zensar Technologies, Lincoln Pharma, Asahi Songwon Colors, Emmbi Industries, M M Forgings, Gulf Oil Lubricants and Palash Securities, among others.

Thursday’s most active stocks
IndusInd Bank (Rs 2857.45 crore) , RIL (Rs 2145.80 crore) , Bajaj Finance (Rs 1833.38 crore) , PVR (Rs 1471.01 crore) , Bajaj Auto (Rs 1440.83 crore) , Dr. Reddy’s Labs (Rs 1172.29 crore) , HDFC Bank (Rs 1165.66 crore) , Chemcon Speciality Chemicals (Rs 997.66 crore) , Axis Bank (Rs 926.73 crore) and Maruti Suzuki (Rs 859.18 crore) were among the most active stocks on Dalal Street on Thursday in value terms.

Thursday’s most active stocks in volume terms
Vodafone Idea (shares traded: 21.54 crore), Trident (shares traded: 7.22 crore), PNB (shares traded: 6.21 crore), IDFC First Bank (shares traded: 5.53 crore), IndusInd Bank (shares traded: 4.98 crore), YES Bank (shares traded: 4.49 crore), SBI (shares traded: 4.36 crore), Tata Motors (shares traded: 4.05 crore), Ashok Leyland (shares traded: 4.04 crore) and Alok Industries (shares traded: 3.57 crore) were among the most traded stocks in the session.

Stocks seeing buying interest
Indiabulls Ventures, Welspun India, Ruchi Soya Industries and Ipca Labs witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Thursday signalling bullish sentiment.

Stocks seeing selling pressure
Laurus Labs, Mittal Lifestyle, S&S Power Switchgears, Silly Monks Entertainment and Shree Ram Proteins witnessed strong selling pressure in Thursday’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 327 stocks on the BSE 500 index settled the day in green, while 169 settled the day in red.

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