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

NEW DELHI: Nifty50 on Friday formed a bullish candle on both weekly and daily charts as it comfortably took out the crucial 17,300-level. Analysts said the bullish stance remains intact and the index may top 17,500 and 17,700 levels in the coming days.

Here’s how analysts read the market pulse:

Mazhar Mohammad of Chartviewindia.in said a move towards the 17,590 level is likely if the index sustains above the 17,200 level to retain its positive bias. “Major weakness should not be expected unless it closes below the 17,050-level,” he said.

Chandan Taparia of Motilal Oswal Securities said a bullish formation on both daily and weekly scales indicates a complete dominance by the bulls. “Nifty has to continue to hold above the 17,250-level to extend the move towards 17,500 and 17,777 levels. Downside support is seen at 17,200 and 17,050 levels,” he said.

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

US shares end mixed on jobs report

The Nasdaq ended Friday at a new peak but the other main Wall Street indexes fell, reflecting the mixed sentiment stemming from a disappointing U.S. jobs report which raised fears about the pace of economic recovery but weakened the argument for near-term tapering. The S&P 500 lost 1.52 points, or 0.03 per cent, to 4,535.43 and the Dow Jones Industrial Average fell 74.73 points, or 0.21 per cent, to 35,369.09. The Nasdaq Composite added 32.34 points, or 0.21 per cent, to 15,363.52.

European shares fall further

European shares extended their fall with a widely watched gauge of banking shares briefly dipping 1 per cent on Friday after data showed US jobs growth in August missed estimates, fuelling fears that bets of a robust economic recovery may be overdone. The pan-European stock index ended 0.56 per cent lower, although European banking stocks clawed back from initial falls to end slightly higher.

Tech View: Nifty bulls show no sign of weakness

Nifty50 on Friday ended the week above the 17,300 mark. The NSE barometer formed a bullish candle on both weekly and daily charts. It was the fifth day when the index formed higher highs and lows on the daily scale. Analysts said the immediate support has shifted higher to the 17,200 level, even though it is the 17,050 level which would be the key for a reversal. A higher target of 17,500 and 17,700 is possible, they said.

F&O: Bulls holding a tight grip

India VIX moved up 2.12 per cent from 14.24 to 14.54 level. Stability in volatility and declines from higher levels suggest the bulls are holding a tight grip over the market. Options data suggested a broader trading range between 16,750 and 17,800 levels, while the immediate trading range was seen between 17,100 and 17,500 levels.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of

, ICICI Pru Life, Granules India, Zee Media Corp, Fineotex Chemical, L&T Technology Services, Kitex Garments, Orient Cement, Godrej Industries, Schneider Electric, Kaveri Seed Company, Sterlite Technologies, Equitas Holdings, Texmaco Rail & Engine, Jagran Prakashan, CSB Bank, Birla Corporation, Ceat, Rupa & Company, Coral India Finance, The Anup Engineering, 5Paisa Capital, Chemfab Alkalis, Kothari Products and Lambodhara Textile.

The MACD is known for signalling 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 HCL Technologies, Steel Strips Wheels,

, Manaksia Steels, Apar Industries, Almondz Global Security and NBI Industrial Finance. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

RIL (Rs 3334.53 crore), Zomato (Rs 1661.38 crore), Exide Industries (Rs 1352.13 crore), Tata Steel (Rs 1214.24 crore), HDFC Life (Rs 1149.62 crore), Infosys (Rs 906.64 crore), L&T Tech (Rs 884.04 crore), Kotak Bank (Rs 870.98 crore), HDFC Bank (Rs 849.33 crore) and Maruti Suzuki (Rs 822.68 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: 96.42 crore), Zomato (Shares traded: 11.34 crore), YES Bank (Shares traded: 11.14 crore), Trident (Shares traded: 7.37 crore), Exide Industries (Shares traded: 6.98 crore), NALCO (Shares traded: 5.91 crore), PNB (Shares traded: 5.36 crore), SAIL (Shares traded: 4.55 crore), BHEL (Shares traded: 4.14 crore) and IDFC First Bank (Shares traded: 3.24 crore) were among the most traded stocks in the session.

Stocks showing buying interest

Shriram City Union, Prestige Estate, Zomato, L&T Tech and Blue Dart witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure

Dodla Dairy, Nandani Creation, Servotech Power Systems and Yuken India witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bulls

Overall, the market breadth remained in favour of the bulls. As many as 275 stocks on the BSE500 index settled the day in the green, while 218 settled the day in the red.

Podcast: What’s taking the market to new highs?
The Domestic equity market is hitting new highs everyday with both the Sensex and Nifty crossing the crucial 58,000-mark and 16,300-level respectively. What’s behind this bull run? Will the market continue to rise? What are the technical charts suggesting?

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