Saturday, June 3, 2023

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


NEW DELHI: Domestic equity indices saw a gap down opening on Friday, but erased all losses to end in the green. The market snapped its four-day losing streak, thanks to buying interest seen in financial, pharma and realty stocks.

Nifty managed to end above the 15,700 mark and formed a trend reversal ‘Hammer’ candle on the daily chart. Analysts said the index may see recovery in the coming week.

Here’s how analysts read the market pulse:-

Sumeet Bagadia of Choice Broking said the index has taken good support at the Lower Bollinger Band formation and has signalled a positive bias on stochastic indicators. “The near term Nifty50 resistance is placed at 15,915 level, while immediate support comes in at 15,600,” Bagadia said.

Chandan Tapria of Motilal Oswal Securities, said, a bullish Hammer candle on the daily chart indicates that declines are being bought into. “Nifty50 has to hold above 15,700 levels to witness a bounce towards 15,850 and 15,900 levels. On the downside, support can be seen at 15,600 and 15,500 levels,” he said.

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

US shares hit record high
Wall Street scaled new highs on Friday, with the S&P closing up for a seventh straight day, after jobs data for June showed robust hiring yet persistent weakness in the labor market that will keep the Federal Reserve from raising interest rates any time soon. The Dow Jones Industrial Average rose 152.82 points, or 0.44%, to 34,786.35, the S&P 500 gained 32.4 points, or 0.75%, to 4,352.34 and the Nasdaq Composite added 116.95 points, or 0.81%, to 14,639.33.

Chipmakers lift European shares
European shares ended slightly higher on Friday on a boost from chipmakers, although gains were capped by weak bank stocks and growing concerns over the Delta variant of the coronavirus. The pan-European STOXX 600 index rose 0.3% to close at 456.81 points, with technology stocks rising 1.1%.

Tech View: Nifty forms Hammer on daily scale
Nifty50 snapped a four-day losing streak on Friday and formed a trend reversal ‘Hammer’ candle on the daily chart. Selling was seen in the support range between 15,650 and 15,600 range. On the weekly scale, the index formed a bearish candle and made a higher high-low formation. Analysts see recovery ahead. Gaurav Ratnaparkhi of Sharekhan said multiple support parameters such as the 61.8 per cent retracement of the previous rise from 15,450 to 15,915 level, the daily lower Bollinger Band, and the lower end of falling channels on hourly and daily charts were present near the 15,650-15,630 zone, which induced the bulls into the action.

F&O: Lower VIX indicates rangebound moves
India VIX fell 5.84% from 12.84 to 12.09 level. The fear gauge gradually drifted lower and hovered near its lowest level in the last 17 months. Lower volatility indicates a rangebound move but at the same time decline could be bought into. On the options front, maximum Put Open Interest was seen at 15,500 levels followed by 15,000 while maximum Call OI was seen at 16,000 followed by 16,500 levels. Call writing was seen at 16,100 levels and then 16,200 while there was Put writing at 15,000 and then 15,500 levels. Options data suggests an immediate trading range between 15,600 and 15,900 levels.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Jain Irrigation, NCC, Tata Chemicals, Greaves Cotton, NIIT, Jyothy Labs, Vedanta, Max Healthcare, ICICI Securities, CCL Products India, Mangalam Cement, Biocon, Aarti Drugs, KEI Industries, Kaveri Seed Company, Hindustan Aeronautic, Strides Pharma, PI Industries, Allied Digital Services, Nippon Life AMC, Borosil, Vinyl Chemicals, Consolidated Finvest, Cyient, Satin Creditcare, Excel Industries, Oriental Aromatics, Apar Industries, Fine Organic Indus, Atul, Future Enterprises and Cambridge Technology.

Stocks signalling weakness ahead

The MACD showed bearish signs on the counters of Tata Steel, Rail Vikas Nigam, Marico, Tata Consultancy, EPL, Alankit, Max Financial Services, MindTree, Gravita India, United Breweries, Orient Abrasives, PTL Enterprises, Shree Rama Newsprint, BLB, L&T Technology Services, Savita Oil Tech, South West Pinnacle, Honda India Power, Kennametal India and Ebix Cash World Money.

Most active stocks in value terms

Happiest Minds (Rs 3,324.71 crore), Route Mobile (Rs 1,870.16 crore), RIL (Rs 1,376.27 crore), Adani Ports SEZ (Rs 1,263.02 crore), HDFC Bank (Rs 1,099.16 crore), Tata Chemicals (Rs 1,007.34 crore), Adani Enterprises (Rs 968.87 crore), Tata Steel (Rs 866.66 crore), Infosys (Rs 802.98 crore) and Aurobindo Pharma (Rs 745.84 crore) were among the most active stocks on Dalal Street in value terms.

Most active stocks in volume terms

Reliance Comm (shares traded: 33.13 crore), Vodafone Idea (shares traded: 32.44 crore), JP Power (shares traded: 8.37 crore), PNB (shares traded: 8.23 crore), HFCL (shares traded: 6.24 crore), Reliance Power (shares traded: 6.05 crore), YES Bank (shares traded: 5.49 crore), BHEL (shares traded: 5.25 crore), GMR Infra (shares traded: 4.55 crore) and Reliance Capital (shares traded: 3.93 crore) were among the most traded stocks in the session.

Stocks showing buying interest

Route Mobile, J B Chemicals, HFCL, Vinati Organics and Fairchem Speciality witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure

Shivalik Bimetal Controls and Uttam Galva Steels witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter

Overall, the market breadth remained in favour of the bulls. As many as 279 stocks on the BSE500 index settled the day in green, while 213 settled the day in red.

Podcast: Is it that easy to make money in smallcap stocks?>>>

While many money managers have been advocating a shift in favour of midcaps, smallcaps too are getting a lot of attention. As against a 1 per cent rise in Nifty50 and 3.5 per cent gain for the Nifty Midcap index, the Nifty Smallcap index has risen over 6 per cent in last one month. In today’s special podcast with independent market expert Rajiv Nagpal, we will try to understand the do’s and don’ts of investing in smallcaps. Listen in.

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