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

MUMBAI: Nifty50 on Monday formed a small bearish candle on the daily chart as it failed to capitalise on the gains seen in the early hours of trade. The index closed more than 300 points off the day’s high, indicating some profit booking.

Here’s how analysts read the market pulse:

Ruchit Jain of Angel One said Nifty50 has seen some consolidation and is trading around the ‘20 EMA’ on the hourly charts, which would offer immediate support on Tuesday. “One should trade with proper risk management and look for stock-specific opportunities for better trade set ups,” Jain said.

Mazhar Mohammad of Chartviewindia.in suggested that the Nifty50 index could come under selling pressure with target around 17,646-17,610 level. “Nifty50 needs to sustain above the gap zone to retain a positive bias, as breach of 17,600 on a closing basis can be considered as an initial sign of weakness,” he said.

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

Tech mega-caps knock off Nasdaq

The Nasdaq index slipped more than 1 per cent on Monday as investors swapped technology heavyweights for stocks linked to economic growth amid increasing confidence in a recovery. At 9:44 a.m. ET, the S&P 500 was down 13.36 points, or 0.30 per cent, at 4,442.12, and the Nasdaq Composite was down 162.58 points, or 1.08 per cent, at 14,885.12.

European shares end lower

Europe’s STOXX 600 index ended lower on Monday as declines in tech stocks offset gains in banks and energy, while German shares hit 10-day highs as the federal election outcome reduced the chances of a left-wing coalition forming a government. The pan-European STOXX 600 index fell 0.2 per cent.

Tech View: Support seen at 17,800

The Nifty50 index ended the day on muted note leading to concerns of some weakness building in the market. Analysts said levels of 17,800-17,750 would offer immediate support to the index while they see 17,950-18,000 range to act as resistance in the short term.

F&O: VIX spike to worry bulls

While the benchmark indices did not provide much action, the spike in volatility gauge India VIX should worry investors. The volatility index closed nearly 7 per cent higher above the 18 points mark on Monday. Continued selling of 18,000-strike price call option suggested that the market does not see room for further upside sans new triggers.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of IDBI Bank, Alok Industries, Equitas Small Finance Bank, HDFC Bank, Sterling and Wilson and Indo Count Industries. 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 UCO Bank, Bharat Electronics, Karnataka Bank, Shriram Transport Finance, Metropolis Healthcare, Network18, Action Construction, Minda Corporation, Dishman Carbogen, Dhanlaxmi Bank, United Breweries, Syngene International, and Voltas. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

Maruti Suzuki (Rs 1926 crore), Tata Motors (Rs 1857 crore), RIL (Rs 1781 crore), Zee Entertainment (Rs 1517 crore), IRCTC (Rs 1408 crore), DLF (Rs 1373 crore), HDFC Bank (Rs 1335 crore), Tata Steel (Rs 1104 crore), HCL Tech (Rs 1005 crore) and Godrej Properties (Rs 925 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 highest trading turnovers in the day.

Most active stocks in volume terms

Vodafone Idea (Shares traded: 34 crore), Tata Motors (Shares traded: 5.6 crore), YES Bank (Shares traded: 5.5 crore), Zee Entertainment (Shares traded: 4.8 crore), Indian Hotels (Shares traded: 4.2 crore), GMR Infra (Shares traded: 3.7 crore), ONGC (Shares traded: 3.4 crore), NALCO (Shares traded: 3.4 crore), PNB (Shares traded: 3.4 crore) and DLF (Shares traded: 3.3 crore) were among the most traded stocks in the session.

Stocks seeing buying interest

EIH, Sterling Wilson Solar, Prestige Estates, GNFC and Tata Motors DVR witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

CarTrade Tech and Aptus Value Housing Finance witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on these counters.

Sentiment meter favours bears

Overall, the market breadth remained in favour of the bears. As many as 217 stocks on the BSE500 index settled the day in the green, while 283 settled the day in the red.

Podcast: What made auto stocks rally today?
The BSE Sensex came off about 334 points from day’s high to close at 60,078, up 29 points. Nifty 50 closed the day flat at 17,855. Declines outnumbered advances, with midcap and smallcap indices closing marginally lower. Only 13 Sensex stocks ended higher, but thanks to buying in Reliance Industries and select bank and auto stocks, the index settled higher for the third straight session. Maruti Suzuki rallied 6 per cent while M&M and Bajaj Auto added up to 4 per cent. What made auto stocks rally today? What’s the outlook?

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