Vinod Nair of Geojit Financial Services said, going ahead, the market may turn a bit volatile in the short-term as it will be difficult to maintain the momentum given important upcoming events of the US election and Q2 earnings season.
“Secondary indices of mid- and smallcaps are under some resistance as investors are risk averse at these levels. Stock-wise positive or negative performance is expected to continue as per the expectation and actual performance of Q2FY21 result,” he said.
Rohit Singre of LKP Securities said the index has immediate hurdle around the 11,800 zone and if it manages to hold above the 11800 zone, then it may see a quick move towards the 12,000-mark.
“Nifty Bank closed a day at 22965 with gains of half a percent, supports are coming near 22700-22400 zone and resistance is coming near 23150-23400 zone,” he said.
Mazhar Mohammad of Chartviewindia.in said, though there is no immediate threat of short-term correction, more weakness can be expected if the Nifty closes below 11,629 levels.
“For the time, traders are advised to remain neutral on the long side but intraday traders with a high-risk appetite can consider shorting if the Nifty opens near 11,770 levels with a stop of 11,810 and can look for a modest target of 11,690,” he said.
That said here’s a look at what some of the key indicators are suggesting for Thursday’s action:
US stocks rise, shaking off Trump’s stimulus shock
Wall Street’s main indexes jumped on Wednesday, recouping losses from the previous session triggered by President Donald Trump’s abrupt call to end stimulus talks, while Levi Strauss hit a four-month high after posting a surprise quarterly profit. The Dow Jones Industrial Average was up 1.21%, the S&P 500 was up 1.11% and the Nasdaq Composite was up 1.17%.
European shares flat as upbeat earnings offset US stimulus doubts
European stocks hovered near a two-week high on Wednesday as upbeat earnings reports from UK’s Tesco and Germany’s Dialog Semiconductor helped offset uncertainties surrounding a fresh US stimulus package. The pan-European STOXX 600 index was trading flat, with banks, insurers and energy companies retreating after a rally in the previous session.
Tech View: Nifty vulnerable to profit taking
Nifty50 on Wednesday jumped for the fifth day in a row and formed a higher high and low. On the daily chart, the index formed a bullish candle. It was not far away from the recent swing high of 11,794 hit on August 31. That said, the broader market is showing clear signs of fatigue and Nifty50 itself looks overbought on the short-term charts. The index needs to clear the 11,750-800 range for any further rise towards the 12,000 mark, analysts said, adding that a failure to do so may trigger profit taking.
Check out the candlestick formations in the latest trading sessions
F&O: VIX needs to cool down further
Nifty opened flat on Wednesday, but continued the positive momentum for most part of the session to extend its gains towards the 11,760 mark. It has been making higher lows since last eight sessions and supports have gradually shifted higher. The index formed a bullish candle and saw the highest daily close in 140 sessions since February 26, 2020. The index has gained nearly 900 points in last eight sessions and continued its winning streak for a fifth session. Now it has to hold above 11,600 level to move up further towards 11,900 and then 12,000 levels, while on the downside major support exists at 11,550 and then 11,450 levels. India VIX marginally moved up by 2.14% from 19.64 to 20.06 levels. It needs to cool down for the bull’s grip to tighten on the market.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Wednesday showed bullish trade setup on the counters of Tata Power, ITC, Indiabulls Housing, Indian Oil Corp, Tata Steel, Canara Bank, M&M, Oil India, Edelweiss, HDFC Life Insurance, Bharat Forge, Sanghi Industries, Sterlite Technologies, Aditya Birla Fashion, Take Solutions, Repco Home Finance, SBI Life Insurance, FDC, RPP Infra Projects, IRB Infrastructure, Thomas Cook, Dhampur Sugar, IOL Chemicals, MEP Infrastructure, Oricon Enterprises, Spencer’s Retail, Everest Industries, Som Distilleries, CARE Ratings, Dhunseri Investments, Sundaram Brake Lining and Naga Dhunseri Group among others.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Vedanta, Escorts, Dr. Reddy’s Labs, Adani Green Energy, Max Financial Services, Himadri Speciality, HSIL, Kopran, Surya Roshni, Compuage Infocom, S H Kelkar & Company, Xchanging Solutions, ADF Foods, Vinati Organics, VRL Logistics, RPG Life Sciences, Symphony, Endurance Technologies, Prime Focus, Coral India Finance, Subros, MPS, Vaibhav Global and Dynacons Systems among others.
Wednesday’s most active stocks
RIL (Rs 5584.70 crore), TCS (Rs 2633.64 crore), Bajaj Finance (Rs 2191.32 crore), HDFC (Rs 1366.46 crore), Vedanta (Rs 1363.34 crore), HDFC Bank (Rs 1226.82 crore), Titan Company (Rs 1176.51 crore), IndusInd Bank (Rs 1174.66 crore), Infosys (Rs 977.83 crore) and Tata Motors (Rs 968.63 crore) were among the most active stocks on Dalal Street on Wednesday in value terms.
Wednesday’s most active stocks in volume terms
Vodafone Idea (shares traded: 18.90 crore), Vedanta (shares traded: 10.80 crore), Tata Motors (shares traded: 6.83 crore), ONGC (shares traded: 5.01 crore), SBI (shares traded: 3.46 crore), ZEEL (shares traded: 3.38 crore), Ashok Leyland (shares traded: 3.36 crore), PNB (shares traded: 3.32 crore), IDFC First Bank (shares traded: 3.19 crore) and YES Bank (shares traded: 3.14 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Thyrocare Technologies, Dr. Lal Pathlabs, Advanced Enzyme Technologies, Ruchi Soya Industries and Infibeam Avenues witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Wednesday signalling bullish sentiment.
Stocks seeing selling pressure
Computer Age Management Services, California Software Company, S&S Power Switchgears and Silly Monks Entertainment witnessed strong selling pressure in Wednesday’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 151 stocks on the BSE 500 index settled the day in green, while 349 settled the day in red.
Podcast: Where is Nifty headed after 5 days of rally >>>
Reliance Industries, HDFC twins and IT firms gave Sensex a 300 point lift today as benchmark indices recorded gains for the fifth day. However, things were grim in the broader market where five stocks fell for every three that rose. Midcap and smallcap indices fell up to 0.7 per cent, reflecting the broader weakness. Nifty 500, the broadest index on NSE, was down 0.45 per cent. We caught up with Deepak Jasani- Head of Retail Research at HDFC Securities who gave us his views on the quarterly results ahead.