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Ahead of the market: 10 things that will decide stock action on Monday
Indian benchmark stock indices ended lower on Friday, once again succumbing to profit booking after hitting all-time highs, although they locked in a third consecutive week of gains driven by a recovery in the financial sector and investor returns foreigners.
The NSE Nifty 50 fell 0.28% to end at 23,501, while the S&P BSE Sensex lost 0.35% to end at 77,210 but managed to make gains for the week.
See how analysts pulse the market:
“Nifty has been hovering in the range of 23,300 to 23,600, indicating indecision, which sets the stage for a very volatile monthly expiry. A decisive move above 23,600 could take the index to 24,000 in the near term, while failure to hold above 23,300 could trigger panic in the market. Below 23,300, Nifty could fall to 22,750 in the near term,” said Rupak De of LKP Securities.
Hrishikesh Yedve, Asit C. Mehta Investment Intermediates, said, “Technically, on a daily basis, the index formed a bearish candle. Furthermore, the index erased all the weekly gains and closed the week on a flat note, indicating distribution at higher levels . As long as the index maintains 23,330 levels, the bullish momentum will continue, on the higher side, 23,700 and 23,800 will act as short-term hurdles.”
That said, here’s what some key indicators suggest for Monday’s action:
US market
US stocks ended mixed on Friday, with Nvidia continuing to fall as traders moved to consolidate gains from a recent rally in technology stocks.
The Dow Jones Industrial Average finished less than 0.1 percent higher at 39,170.36.
European stocks
European shares closed lower on Friday, weighed down by falls in technology and banking stocks, while Danish brewer Carlsberg Group was the day’s worst performer after British soft drinks maker Britvic rejected its revised takeover proposal.
The European STOXX 600 ended down 0.7%, with the technology sub-index losing around 1.3% and euro zone banks falling 1.7%.
Technical overview
Nifty’s struggle to stay above the day’s opening range indicates that bullish sentiments worsened on Midsummer Day, said analyst Rahul Ghose, CEO of Hedgedin. The increase in open interest (OI) CALL writing at 23,600 and above levels further indicates resistance for the June monthly expiry around these levels, he said, adding that the PCR opened at 1.16 and fell to the levels of 0.88. This indicates limited trading for the remaining June series, he added.
Stocks showing bullish bias
Momentum Indicator Moving Average Convergence Divergence (MACD) showed upbeat trading at the counters of Kirloskar Oil Engines, KSB, Jindal Steel & Power, Lux Industries, GM Breweries and Ircon International, among others.
The MACD is known for signaling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the security’s price may undergo an upward movement and vice versa.
Stocks Signaling Weakness Ahead
The MACD showed bearish signs on the counters of Supreme Industries, Bajaj Auto, Mahindra & Mahindra, HG Infra Engineering, TVS Motor, CAMS and Symphony, among others. The bearish crossover in MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in terms of value
ICICI Bank (Rs 8,023 crore), Bharti Airtel (Rs 6,208 crore), RIL (Rs 4,533 crore), HDFC Bank (Rs 4,281 crore), Adani Ports (Rs 3,845 crore), Axis Bank (Rs 3,603 crore) and Kotak Mahindra Bank (Rs 3,373 crore), among others, were among the most active stocks on the NSE in terms of value. Greater activity on a counter in terms of value can help identify counters with higher trading volumes for the day.
Most active stocks in terms of volume
Vodafone Idea (Shares traded: 175 crore), Suzlon Energy (Shares traded: 14 crore), YES Bank (Shares traded: 11 crore), IRFC (Shares traded: 9.6 crore), RVNL (Shares traded: 7.5 crore ), SAIL (Shares traded: 6.9 million) and ICICI Bank (Shares traded: 6.9 million), among others, were among the most traded stocks in the NSE session.
Stocks Showing Buying Interest
Shares of Titagarh Wagons, Raymond, Kalyan Jewellers, CE Info Systems, Suzlon Energy, Bayer Cropscience and Zensar Tech, among others, witnessed strong buying interest from market participants as they scaled their new 52-week highs, signaling a bullish feeling.
Stocks Seeing Selling Pressure
Allcargo Logistics shares hit 52-week lows, signaling bearish sentiment at the counters.
Sentiment Meter Favors Bears
Overall, market breadth favored bears as 2,157 stocks ended in the red while 1,729 names were in the green.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. They do not represent the views of the Economic Times)