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

The domestic equity market bounced back sharply on Tuesday as it recovered from the shock ignited by hawkish comments from US Federal Reserve Chairman Jerome Powell at the Jackson Hole economic conference last Friday. All sectoral indices ended in positive territory with banking, financial services, and realty being top performers up more than 3 per cent each.

Here’s how analysts read the market pulse:

Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities, said all bullish eyes now will be on Nifty’s psychological 18,000 mark with the next goalpost being at 18,605 mark. The Nifty line on the sand is at the 17,421 mark.

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Deepak Jasani, Head of Retail Research, HDFC Securities, said Nifty has nullified the bearish signals from the downgap created on the previous day and has filled that downgap. “It has closed at the highest ever on monthly charts. It will now face resistance at the 17,965-17,992 band while the 17,522-17,623 band could offer support.”

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

US market down
Stocks fell on Wall Street on Tuesday, posting their third loss in a row as traders worry that high interest rates are here to stay for a while. The S&P 500 fell 1.1% Tuesday, bringing its loss in the past three days to 5.1%. The Dow Jones Industrial Average and the Nasdaq also fell. Energy companies fell along with sliding crude oil prices. Technology stocks and industrial companies were also weak.

European shares bounce back

European shares edged higher on Wednesday, supported by strong performances in tech stocks following a three-day selloff, with focus on regional inflation figures due later in the session. The continent-wide STOXX 600 was up 0.4%, as of 0716 GMT, snapping three consecutive days of losses. But the index was set for a monthly loss of nearly 4%. UK’s FTSE 100 fell on Wednesday, extending losses after a sharp selloff in the previous session, as a weakness in defensive sectors such as healthcare, utilities and consumer staples weighed on the blue-chip index.

Tech View: Large bullish candle

Nifty50 took out its recent swing high and formed a large bullish candle on the daily chart. Analysts said the index could face stiff resistance around 17,900 levels and see immediate support at the 17,600 level.

Stocks showing bullish bias

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

, , , , GMR Infra 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

, Wockhardt, KPR Mill, and .

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 2,792 crore),

(Rs 1,289 crore), (Rs 1,252 crore), (Rs 1,102 crore), TCS (Rs 1,095 crore), and Infosys (Rs 999 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: 6.7 crore), NTPC (Shares traded: 2.5 crore), ONGC (Shares traded: 2.2 crore), ITC (Shares traded: 1.8 crore), SBI (Shares traded: 1.5 crore) and

(Shares traded: 1.4 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest

Shares of ICICI Bank, M&M, ITC,

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

Stocks seeing selling pressure
Shares of

were among those that witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls

Overall, market breadth favoured winners as 2,328 stocks ended in the green, while 1,095 names settled with cuts.

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