Nagaraj Shetti of HDFC Securities said, the underlying short-term trend of Nifty continues to be positive.
“Present consolidation pattern could end soon and Nifty could resume its uptrend in the coming sessions. The upside levels needs to be watched around 12,250 for the next 3-4 sessions. Immediate support is placed at 11,850,” he said.
Ajit Mishra of Religare Broking said, along with global cues, earnings announcements and macroeconomic data would dictate the market trend.
“Further, measures announced by FM to help revive the economy as well as spur demand would augur well for major sectors such as FMCG, auto, capital goods, banking etc.. Amid all, we expect volatility to remain high. Thus, traders should maintain extra caution in trade selection and risk management,” he said.
Vinod Nair of Geojit Financial Services said, the market will look forward to the Q2 results and an end to the moratorium saga.
“IT, Banks and FMCG will be the sectors under focus in the near-term,” he said.
That said here’s a look at what some of the key indicators are suggesting for Tuesday’s action:
US stocks rally on stimulus hopes
Wall Street’s main indexes rose for a fourth straight session on Monday, helped by a tech boost and on optimism that Washington would reach a deal over more fiscal support, with investors also gearing up for the third-quarter corporate earnings season. The Dow Jones Industrial Average was up 181.99 points, or 0.64%, at 28,768.89, the S&P 500 was up 35.66 points, or 1.03%, at 3,512.79, and the Nasdaq Composite was up 181.30 points, or 1.57%, at 11,761.24.
European shares gain on rebound optimism
European shares crept higher on Monday, tracking gains in Asia that were fuelled by optimism over a rebound in China’s economy, while trade-sensitive stocks rose after a report that the EU’s trade chief had called on Washington to drop some tariffs. The pan-European STOXX 600 was up 0.3%, with insurance and auto stocks among the biggest gainers.
Tech View: Nifty bulls turn indecisive at 12,000
Nifty50 on Monday climbed for the eighth session in a row, but that didn’t inspire confidence as the index gave up most of the day’s gains. The day saw the index erase gains from a swing high of 12,022, before adding up marginally. It was all reflected in a Doji candle that got formed on the daily chart, which suggested indecisiveness among traders at higher levels. Weakness may creep in now, warned analysts, who see support for Nifty at 10,850-10,790 levels. “If the bulls fail to take the index beyond the 11,970-12,000 resistance zone, it will trigger profit booking and drag Nifty lower to 11,800-11,750 levels. However, a sustained trade above 12,000 level will resume the uptrend and take the index higher to 12,100-12,250 levels,” said Aditya Agarwala of YES Securities.
Check out the candlestick formations in the latest trading sessions
F&O: Rise in VIX raises doubts over Nifty trend
India VIX rose 3.67 per cent from 20.38 to 21.12 level. It needs to cool down below 20-19 zone for the bull’s grip on the market to tighten. Options data suggested a wider trading range between 11,600 and 12,200 levels, while the immediate trading range is placed between 11,700 and 12,100 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Monday showed bullish trade setup on the counters of Lupin, Trent, PNC Infratech, Jammu & Kashmir Bank, Jagran Prakashan, Career Point, Sanco Industries, Mangalam Drugs, Kamdhenu, RS Software (India), Somi Conveyor, Oriental Trimex, D P Wires, Esab India, GTN Industries and Poddar Housing among others.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Tata Motors, NCC, Grasim Industries, Adani Enterprises, Fortis Healthcare, Godrej Consumer, Indian Hotels, Sequent Scientific, Delta Corp, Balkrishna Industries, Quick Heal Technologies, Suven Life Sciences, ITD Cementation, Gayatri Projects, Man Infraconstructions, Camlin Fine Sciences, Ajanta Pharma, Mahindra CIE Auto, La Opala RG, DB Corp, Liberty Shoes, Allied Digital Services, Hercules Hoists, KPR Mill, Speciality Restaurants, Brigade Enterprises, Apollo Pipes, Brooks Laboratories, Sanghvi Movers, Mukand, S P Apparels, Orient Refractories, Sasken Technologies, BASF India, Hinduja Global Solutions, Sanofi India, Jindal Drilling, Sandhar Technologies, PPAP Automotive, Emmbi Industries and Mazda among others.
Monday’s most active stocks
Wipro (Rs 1989.08 crore), Infosys (Rs 1644.32 crore), RIL (Rs 1469.92 crore), Vedanta (Rs 1438.41 crore), SBI (Rs 1391.52 crore), TCS (Rs 1309.10 crore), HDFC Bank (Rs 1172.84 crore), ITC (Rs 1142.83 crore), Bajaj Finance (Rs 1067.99 crore) and ICICI Bank (Rs 1043.84 crore) were among the most active stocks on Dalal Street on Monday in value terms.
Monday’s most active stocks in volume terms
Vedanta (shares traded: 14.49 crore), Vodafone Idea (shares traded: 10.05 crore), YES Bank (shares traded: 8.61 crore), SBI (shares traded: 6.91 crore), ITC (shares traded: 6.62 crore), Wipro (shares traded: 5.30 crore), ZEEL (shares traded: 4.78 crore), Mazagon Dock Shipbuilders (shares traded: 3.99 crore), Tata Motors (shares traded: 3.93 crore) and Bank of Baroda (shares traded: 3.68 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Larsen & Toubro Infotech, Coforge, Tata Elxsi, Hathway Cable and Thyrocare Technologies witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Monday signalling bullish sentiment.
Stocks seeing selling pressure
Chemcon Speciality Chemicals, Future Lifestyle Fashions, Ingersoll Rand (India) and Khandwala Securities witnessed strong selling pressure in Monday’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 146 stocks on the BSE 500 index settled the day in green, while 353 settled the day in red.
Podcast: Are bulls tired after 8 days of rally? >>>
Midcaps and smallcaps underperformed the largecap. Sector wise, the BSE IT, TECk, Healthcare and FMCG index advanced up to 1.50 per cent. On the other hand, other sectoral indices ended in the red. While the Sensex closed 84 points up at around 40,594, Nifty settled at 11,931. We caught up with G Chokkalingam, Founder, Equinomics Research and Advisory to try and understand the market undercurrent.