Ahead of Market: 10 things that will decide stock action on Monday

Domestic equity index Nifty snapped an eight-day winning run on Friday but managed to end in the green on the weekly scale. Interest rate sensitive sectors such as banking, auto & realty stocks witnessed heavy profit-taking. NSE volumes were higher than the average of the last few months, suggesting aggressive selling after a sustained rise.

Here’s how analysts read the market pulse:

Palak Kothari of Choice Broking said the support for Nifty has shifted around 17,600 levels while on the upside 18,000 may act as an immediate hurdle. On the other hand, Bank Nifty has support at 38,500 levels while resistance at 40,000 levels.

Smart Talk

Amol Athawale of Kotak Securities said fresh uptrend is possible only if the index clears the resistance of 17,950, which could then take it further to 18,050-18,150 levels.

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

US market tumbles

Stocks tumbled on Friday as Wall Street’s summer rally faltered and rate hike fears resurfaced, leading the major averages to end the week on a sour note. The S&P 500 slid 1.29% to close at 4,228.48, while the Dow Jones Industrial Average tumbled 292.30 points, or 0.86%, to 33,706.74. The Nasdaq Composite dropped 2.01% to settle at 12,705.22. For the week, the S&P edged 1.21% lower, while the Dow slipped 0.16%. The tech-heavy Nasdaq closed out the week down 2.62%.

European shares end lower

European markets closed lower Friday, tracking global uncertainty as investors chart the course for monetary policy and continue to digest corporate earnings reports. The pan-European Stoxx 600 provisionally ended 0.8% lower, with travel and leisure stocks leading losses, down 3%. Health care stocks, meanwhile, added 0.7%.

Tech View: Bearish candle on daily charts

Nifty50 formed a bearish candle on the daily chart that engulfed the last few sessions of indecisive candles, sending signs of weakness. On the weekly scale, the index formed an indecisive candle after four bullish candles. Analysts said the index could be in for a consolidation, with bias negative.

Stocks showing bullish bias

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

, Emami, Tata Comm, ABB Power, Mastek and .

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 Varroc Engg,

, IOC, ONGC, and Anupam Rasayan.

Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

(Rs 2,126 crore), RIL (Rs 1,149 crore), (Rs 1,008 crore), (Rs 941 crore), (Rs 872 crore), and (Rs 844 crore) 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

Tata Steel (Shares traded: 5.7 crore), ONGC (Shares traded: 3.5 crore), Adani Ports SEZ (Shares traded: 2.5 crore),

(Shares traded: 1.7 crore), Bharti Airtel (Shares traded: 1.4 crore) and SBI (Shares traded: 1.1 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest

Shares of Adani Ports SEZ, L&T, Infosys,

, and TCS witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Shares of

, Bajaj Finserv, , Tata Motors, Tata Consumer, BPCL and were among those that witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears

Overall, market breadth favoured losers as 1,361 stocks ended in the green, while 2,047 names settled with cuts.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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