Here’s how analysts read the market pulse:
Mazhar Mohammad of Chartviewindia.in said as long as Nifty50 sustains above 16,376-level, it can be expected to remain sideways in the 16,6360-16,400 range. “Strength in the index shall not be expected unless it closes above 16,650 level,” he said.
Independent analyst Manish Shah said a relatively narrow range is a sign that the market is getting nervous as the August F&O expiry draws near. “Once the index breaks above 16,580, the index may rally towards 16,780-16,800 by the expiry. As the line of least resistance is bullish, this upcoming F&O expiry could be in favor of the bulls,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:
Wall St recovers on surge in banks, energy shares
Wall Street’s main indexes rose on Monday, with banks and energy shares leading the gains, as investors returned to riskier assets after a sharp selloff last week that was fanned by worries about slowing economic growth. At 10:04 a.m. ET, the Dow Jones Industrial Average was up 232.69 points, or 0.66 per cent, at 35,352.77, the S&P 500 was up 32.79 points, or 0.74 per cent, at 4,474.46. The Nasdaq Composite was up 142.81 points, or 0.97 per cent, at 14,857.47, with Facebook Inc, Apple Inc, Amazon.com, Google-owner Alphabet Inc and Tesla Inc all up between 0.6 per cent and 2.7 per cent.
European shares close higher
European stocks recovered from their biggest weekly loss in nearly six months on Monday, helped by mining and oil stocks as commodity prices bounced back from steep losses driven by uncertainty over U.S. monetary policy and rising COVID-19 cases. The pan-European STOXX 600 index closed 0.7 per cent higher after losing nearly 1.5 per cent last week. Oil and mining were the best performing sectors, rising about 2.1 per cent and 1.5 per cent respectively.
Tech View: Nifty in consolidation mode
Analysts said Nifty50 is consolidating and believe a breakout of the 16,580-600 resistance range is a must for it to show strength. Till then, Nifty50 is likely to keep moving in the 16,350-600 range, they said. For the day, the opening level proved to be the day’s higher point, as the index tested 16,400 levels only to weaken before recovering some of the lost ground. Analysts said the recovery was seen after the index tested its 13-day simple moving average (16400). They noted that the index did not violate the preceding session’s low at 16,376 level.
F&O: VIX needs to hold 12 level
India VIX fell 2.39 per cent from 14.01 to 13.68 levels. A cooldown in volatility from recent swing highs has given a range-bound bias now VIX needs to hold below 12 level to get some buying interest in the broader market. Options data suggested a broader trading range between 16,200 and 16,700 levels, while an immediate trading range was seen between 16,300 and 16,600 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Escorts, Infibeam Avenues, Mahindra Logistics, Dhani Services, Kennametal India, Future Enterprises, SMS Lifesciences Ind and Naga Dhunseri Group.
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 Canara Bank, Axis Bank, Tata Steel BSL, Allcargo Logistics, Tata Chemicals, Birlasoft, IRCTC, Titagarh Wagons, Hindustan Oil Exploration,, Jubilant Foodworks, Au Small Finance Bank, Hikal, Inox Leisure, Websol Energy System, Suprajit Engineering, Max Ventures, TCPL Packaging, VRL Logistics, Suven Pharmaceutical, Power Mech Projects, GTPL Hathway, Neogen Chemicals, Tata Investment, Jubilant Industries, BASF India, Themis Medicare, Esab India and TeamLease Service. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
Tata Steel (Rs 3132.13 crore), TCS (Rs 1361.74 crore), Bajaj Finance (Rs 1175.85 crore), Nuvoco (Rs 1167.09 crore), Cadila Healthcare (Rs 1150.04 crore), Mindtree (Rs 1108.01 crore), HCL Tech (Rs 1087.62 crore), SBI (Rs 1084.81 crore), Infosys (Rs 1077.91 crore) and SAIL (Rs 1025.48 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: 47.87.94 crore), YES Bank (Shares traded: 12.98.94 crore), Vishesh Info (Shares traded: 9.56 crore), SAIL (Shares traded: 8.75 crore), JP Power (Shares traded: 7.29 crore), Zomato (Shares traded: 6.84 crore), PNB (Shares traded: 5.48 crore), IDFC First Bank (Shares traded: 4.21 crore), BHEL (Shares traded: 4.11 crore) and Suzlon (Shares traded: 3.79 crore) were among the most traded stocks in the session.
Stocks showing buying interest
MindTree, HCL Tech, Emami, L&T Infotech and Schaeffler India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
Biocon, Nuvoco Vistas Corporation, Glenmark Life Sciences, YES Bank and Aarti Drugs witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, the market breadth remained in favour of the bears. As many as 114 stocks on the BSE500 index settled the day in the green, while 383 settled the day in the red.
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