Kolkata Stocks：Ahead of Market： 10 things that will decide stock action on Monday
Indian benchmark equity indices closed lower on Friday as investors booked profits following a week of record highs in the blue-chip indices. The Nifty 50 dipped 0.14% to 26,179 points, while the BSE Sensex declined 0.3% to 85,571.
Both indices posted weekly gains, with the Nifty rising 1.5% and the Sensex up 1.2%, marking their third consecutive week of growth.
Here’s how analysts the market pulse:Kolkata Stocks
“The Nifty took a breather after a few days of continuous gains. The sentiment remains strong as the index continues to stay above important moving averages. This strength is likely to persist as long as it remains above 25,900. On the higher end, a fresh round of rally may begin above 26,300. If the Nifty moves above 26,300, it could potentially rise towards 26,600,” said Rupak De, LKP Securities.
Hrishikesh Yedve of Asit C Mehta Investment Interrmediates, said, “Technically, the index on a daily scale has formed a small red candle and on a weekly scale index has formed a big green candle. Moreover, the index on a weekly scale has managed to close above the breakout of the rising channel pattern, indicating strength. In the short term, as long as, Nifty holds above the breakout level of 26,000 a “buy on dips” strategy should be adopted. On the upside, 26,500 will be an immediate short-term target for the index.”
That said, here’s a look at what some key indicators are suggesting for Monday’s action:
US market:
The blue-chip Dow Jones Industrial Average closed at a record high as a subdued inflation report stoked hopes for more Federal Reserve rate cuts, which also boosted small-cap stocks and enabled Wall Street’s three main indexes to post weekly gains.
The technology-heavy Nasdaq slipped for the day while the S&P 500 edged slightly lower, but both indexes stayed close to recent record highs.
The Dow Jones Industrial Average rose 0.33% to 42,313, the S&P 500 lost 0.13% to 5,738 and the Nasdaq Composite lost 0.39% to 18,119.
European shares:
Europe’s STOXX 600 share index closed at a record high on Friday as companies and sectors exposed to China continued to rally after Beijing unveiled a raft of stimulus measures this week, with luxury firms amongst the biggest gainers.
The pan-European STOXX 600 closed up 0.5% at 528.08, taking its gains for the week to more than 2%. Luxury firms LVMH and Richemont gained 3.7% and 2.7%, respectively.
Tech View: Small negative candle
The Nifty50 index formed a small negative candle on the daily chart at the new highs, which indicates a breather-type pattern post the upside breakout. As happened in the past, the market is expected to shift into a range-bound action for a few sessions before witnessing another upside breakout.
On the weekly chart, it formed a long bull candle which is the third consecutive candle in a row. Technically, this weekly market action is indicating a bullish ‘three advancing soldiers’ type pattern which signals uptrend continuation.
The near-term uptrend of the market remains intact wherein Nifty could eventually bounce after the consolidation in the next few sessions. The immediate support is at 25,900, said Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the call side was observed at 26,200 and 26,300 strike prices, while on the put side, the highest OI was at 26,200 strike price followed by 26,100.
Stocks showing bullish bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of BPCL, SJVN, Phillips Carbon, Brigade Enterprises, Sundaram Finance, and Amara Raja Energy & Mobility among others.
The MACD is known for signaling trend reversals in traded securities or indicesKolkata Wealth Management. 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 signaling weakness ahead:Surat Stock
The MACD showed bearish signs on the counters of Balkrishna Industries, Kfin Technologies, Jubilant Food, M&M Financial, Nuvoco Vistas Corp, and BEML among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms:
Trent (Rs 8,758 crore), Divi’s Labs (Rs 3,752 crore), LTIMindtree (Rs 3,236 crore), Infosys (Rs 2,872 crore), NTPC (Rs 2,356 crore), Jio Financial Services (Rs 2,205 crore), and M&M (Rs 2,167 crore) among others were among the most active stocks on NSE 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: 112.2 crore), Shree Renuka Sugars (Shares traded: 25.3 crore), Easy Trip Planners (Shares traded: 12 crore), Canara Bank (Shares traded: 11.8 crore), YES Bank (Shares traded: 6.4 crore), Jio Financial Services (Shares traded: 6.1 crore), and Zomato (Shares traded: 5.9 crore) among others were among the most traded stocks in the session on NSE.
Stocks showing buying interest:
Shares of Balrampur Chini, BPCL, Bombay Burmah, Phillips Carbon, Praj Industries, Aditya Birla Retail, and Sundaram Finance among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure:
Shares of CSB Bank hit their 52-week lows, signaling bearish sentiment on the counter.
Sentiment meter bears:
Overall, market breadth favoured bears as 2,017 stocks ended in the red, while 1,932 names settled in the green.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Lucknow Wealth Management