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

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NEW DELHI: Rapidly rising Covid-19 cases in the country have again made traders cautious on Dalal Street. Despite market rallying in the week gone by, there are many analysts who believe it may not be sustainable.

Here’s how analysts read the market pulse:

Friday’s indecisive candle was seen at 61.8 per cent Fibonacci retracement of the decline from the top. Also, while Nifty Bank remained the top gainer among sectoral indices, it ended up forming a ‘Shooting Star’ pattern on the daily chart, Yesha Shah of Samco Securities said.

Chandan Taparia of Motilal Oswal Securities said that a ‘Spinning Top’ candle on the daily chart and a strong bullish candle on the weekly scale indicate that buying interest is intact in the market, but the absence of follow-up is also seen at higher zones. Now it has to hold above 17,777, for an up move towards 18,000 and 18,200 levels, whereas support shifts higher to 17,600 and 17,500 zones.

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

Wall St posts decline for first week of 2022

Wall Street on Friday wrapped up the first week of the new year with daily and weekly losses as investors worried about looming U.S. interest-rate hikes and unfolding Omicron news. The Nasdaq posted its biggest weekly percentage fall since February 2021 and led the declines on Friday among the major indices.

The Dow Jones Industrial Average fell 4.81 points, or 0.01 per cent, to 36,231.66, the S&P 500 lost 19.02 points, or 0.41 per cent, to 4,677.03 and the Nasdaq Composite dropped 144.96 points, or 0.96 per cent, to 14,935.90.

For the week, the Dow fell 0.3 per cent, the S&P 500 declined 1.9 per cent and the Nasdaq dropped 4.5 per cent.

UK’s FTSE 100 index ends third week higher

The FTSE 100 rose on Friday to end the first week of the year higher on support from heavyweight banking and mining stocks, while investors sought to interpret mixed U.S. jobs data and its impact on Federal Reserve policy. The commodity-heavy FTSE 100 ended 0.5 per cent higher, rising for a third consecutive week with banks and miners leading gains.

While the broader STOXX Europe 600 index ended the week with cuts.

Tech View: Nifty forms Indecisive Doji candle

Nifty50 on Friday formed an indecisive candlestick pattern on the daily chart for the second straight session, but ended up making a bullish candle on the weekly chart. Analysts said the index is finding resistance at highs and that follow-up buying is missing.

F&O: Rs 18,000 immediate resistance

Analysts said if we look at the derivative data then FIIs’ long exposure stands at 68 per cent while the put-call ratio is sitting at 1.26 level which is neutral to positive for the market. If we look at the OI distribution chart then the highest OI on the call side is placed at the 18,000 mark which will act as immediate resistance while the highest OI on the put side is placed at 17,500 level that is major support.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Burger King, JTL Infra, Zen Technologies, Jamna Auto, Inox Leisure, Motilal Oswal and Future Enterprises.

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 price of the security may see an upward movement and vice versa.

Stocks signalling weakness ahead

The MACD showed bearish signs on the counters of Adani Enterprises, Aurobindo Pharma, Allcargo Logistics, MTAR Tech, ICICI Securities and Mindspace Business Parks. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

HDFC (Rs 1606 crore), Reliance Industries (Rs 1475 crore), Titan (Rs 1214 crore), SBI (Rs 1127 crore), IRCTC (Rs 1069 crore), ICICI Bank (Rs 974 crore) and TCS (Rs 945 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with the highest trading turnovers in the day.

Most active stocks in volume terms

Vodafone Idea (Shares traded: 26 crore), YES Bank (Shares traded: 16 crore), GMR Infra (Shares traded: 13 crore), Suzlon Energy (Shares traded: 11 crore), Nalco (Shares traded: 5 crore), and PNB (Shares traded: 5 crore) were among the most traded stocks in the session.

Stocks showing buying interest

India Cements, KPIT Tech, Sun Pharma Advanced Research, Asahi Ind Glass, Magma Fincorp and Tata Teleservices witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Mas Financial Services witnessed strong selling pressure and hit its 52-week lows, signaling bearish sentiment on the counter.

Sentiment meter favours bulls

Overall, market breadth was in favour of gainers as 2,104 stocks ended in the green, while 1,305 names settled with cuts.

Podcast: Is FMCG a no-go zone for investors in 2022?

Amid inflationary pressures, FMCG stocks have been languishing for a while now. In the last 3 months, Nifty FMCG index has delivered a negative return of 5.87 per cent even as the headline index Nifty remained almost flat during the period. After underperforming in 2021, is the worst over for the FCMG pack? Or will input cost pressure continue to haunt investors in this space? What is the expectation from Q3 numbers?