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


NEW DELHI: As Nifty ended above 11,750 on Friday, it formed an ‘Inside Bar’ pattern on the daily chart. Vinod Nair of Geojit Financial Services said the index has a strong support at 11,500, which can limit the downside in the near-term.

“The market will look forward with high hopes on Q2 results and update on stimulus plans. IT, telecom, pharma and banks will be the sectors under focus with a positive bias,” he said.

Ajit Mishra of Religare Broking said indications are in the favour of consolidation in Nifty, thus a stock-specific trading approach should be continued maintaining positions on both sides.

“Meanwhile, global cues will be on the radar as US elections are just around the corner as well as the second wave of Covid-19 infection has led to more lockdown and restriction. Any further rise in restrictions could severely impact investors’ sentiments,” he said.

Mazhar Mohammad of Chartviewindia.in said any rally may remain vulnerable to selloffs.

“As long as Nifty50 sustains above 11,661, it can make an attempt to recoup some of the losses by rallying into the zone of 11,843-885 levels. A breach of 11,661 shall not only resume the downswing, but also confirm a multi-week top around 1,2025 levels,” he said.

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

S&P 500, Dow closed higher on vaccine update
The S&P 500 and Dow Jones advanced on Friday as further clarity regarding the timeline for the development of a coronavirus vaccine and much better-than-expected retail sales data and brought buyers back to the market. The Dow Jones Industrial Average rose 112.11 points, or 0.39%, to 28,606.31, the S&P 500 gained 0.47 points, or 0.013%, to 3,483.81 and the Nasdaq Composite dropped 42.31 points, or 0.36%, to 11,671.56.

Vaccine hopes, upbeat earnings power European shares
European shares bounced on Friday on hopes that a vaccine for the novel coronavirus could be available in the United States before the end of the year. A clutch of upbeat quarterly earnings also lifted sentiment after a torrid week. The FTSE ended the day with a gain of 87.06 points, or 1.49 per cent, at 5919.68.

Tech View: Nifty shows signs of recovery
Nifty50 closed above the 11,750 level on Friday and showed initial signs of a recovery after Thursday’s selloff. Analysts said the occurrence of an ‘Inside Bar’ pattern on the daily chart, a day after the formation of a long bearish candle was a sign of resilience.

F&O: Nifty setup shows bounce may sustain
Overall, the price and data setup shows that a bounce may occur, but multiple hurdles at higher zones could keep the upside of the market restricted over the next few sessions. The index now has to hold above the 11,750 level to witness a bounce towards the 11,850 mark, while on the downside, support exists at 11,666 and then 11,550 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of SAIL, DLF, Mahanagar Gas, Poly Medicure, Gujarat Pipavav Port, Refex Industries, Cummins India, IFB Industries, GSFC, Kaveri Seed Company, IIFL Securities, Avadh Sugar & Energy, Tata Communications, Tata Metaliks, Arvind Fashions, MBL Infrastructures, Sundaram Finance, Dixon Technologies, GPT Infraprojects, Alkali Metals, Jindal Worldwide, GMM Pfaudler, Creative Peripherals, Crisil, TCI, Arman Financial Services, Rane (Madras), Kanoria Chemical, GE T&D India and Ortin Laboratories among others.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of HCL Technologies, Wipro, Mindtree, M&M, Laurus Labs, Dabur India, Apollo Hospitals, Himatsingka Seid, Ramco Systems, Graphite India, PNB Housing Finance, Wockhardt, Uttam Galva Steels, Heidelberg Cement In, Narayana Hrudayalaya, Metropolis Healthcare, Texmo Pipes, HBL Power Systems, Godrej Agrovet, Ind-Swift Laboratories, Trigyn Technologies, Garden Reach Ship, GSS Infotech, Sutlej Textiles, Career Point, Ashiana Housing, Nilkamal, Mukta Arts, Smartlink Holdings, Ratnamani Metals and Shiva Mills.

Friday’s most active stocks
HCL Tech (Rs 2,422.27 crore), RIL (Rs 2,187.61 crore), Infosys (Rs 2,053.79 crore), Bajaj Finance (Rs 1,639.86 crore), HDFC Bank (Rs 1,535.72 crore), TCS (Rs 1,453.59 crore), Mindtree (Rs 1,198.66 crore), Tata Steel (Rs 1,116.60 crore), UPL (Rs 1,085.90 crore) and Dr Reddy’s Labs (Rs 1,027.57 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: 12.26 crore), Tata Motors (shares traded: 6.25 crore), YES Bank (shares traded: 6.04 crore), Ashok Leyland (shares traded: 4.70 crore), Federal Bank (shares traded: 4.42 crore), SBI (shares traded: 3.69 crore), ZEEL (shares traded: 2.95 crore), HCL Tech (shares traded: 2.90 crore), Tata Steel (shares traded: 2.88 crore) and ICICI Bank (shares traded: 2.53 crore) were among the most traded stocks in the session.

Stocks seeing buying interest
Poly Medicure, Amber Enterprises India, JSW Steel, JK Cement and Hero MotoCorp witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday, signalling bullish sentiment.

Stocks seeing selling pressure
Mittal Lifestyle, Zee Learn, Sintercom India, Central Bank and WABCO India witnessed strong selling pressure in Friday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bulls
Overall, the market breadth remained in favour of bulls. As many as 355 stocks on the BSE 500 index settled the day in green, while 142 settled the day in red.

Podcast: Will market witness more bouts of profit-taking?>>

D-Street’s longest rally in 13 years came to a halt last week amid resurgent Covid-19 fears. The re-imposition of lockdown in certain European countries doesn’t inspire confidence that we are past the worst. In this scenario, should one stay on the sidelines for sometime and wait for the uncertainty to dissipate? Which are the sectors where investors can take shelter now?





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