NEW DELHI: As Nifty rebounded sharply on Friday, recovering around 300 points from the day’s low in the last hour of trade, analysts said currently the market seemed to be driven by global cues and stock-specific actions will be the norm going ahead.
Gaurav Ratnaparkhi of Sharekhan by BNP Paribas said the intraday recovery halted near the key hourly moving averages that had been restricting the index from climbing above the psychological mark of 10,000.
“The weekly chart is showing signs of weakness as the index formed a bearish outside bar near the key weekly moving averages. Thus, the recent high of 10,328 becomes a major hurdle for Nifty. On the flip side, Friday’s low of 9,544 will now become a short-term support,” he said.
Sumeet Bagadia of Choice Broking said momentum indicator RSI stood at 59.62 with positive crossover which signalled strength in the index. “At its current level, the index is having good support at 9,550 level while it has resistance at 10,100,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s market action:
US stocks staged major rebound
The Dow and the US stock market staged a rebound on Friday, following massive losses in the prior session. Stocks attempted to recover following the sharpest selloff in three months on Thursday. Though the rally lost some steam in the afternoon, major indices ended the day higher. The Dow closed up 477 points, or 1.9%, after having risen more than 800 points in the morning. The S&P500 ended up 1.3%, and the Nasdaq 1%.
European shares closed higher on Friday
European markets closed slightly higher on Friday, attempting to recover from the previous session’s sharp sell-off. While FTSE100 and CAC40 gained half a per cent each, the DAX fell marginally by 0.18 per cent. The UK posted the biggest monthly fall in GDP on record in April, marking a sharper contraction than the 18.4% expected by analysts polled by Reuters.
Tech View: Nifty weekly charts not encouraging
On Friday, Nifty formed a long bullish candle on the daily chart with marginal upper wick. Analysts said the recovery following a gap-down opening was encouraging, but a ‘Bearish Engulfing’ candle on the weekly chart is not. Analysts see consolidation ahead. The index closed the day at 9,972, up 70.90 points or 0.72 per cent.
F&O: Nifty range between 9,500 & 10,300
On Friday, there was marginal Call writing at strike price 10,000 followed by 10,200, while Put writing was seen at 9,700 and 9,600 levels. Options data suggested a wider trading range between 9,500 and 10,300 levels. India VIX moved up 3.91 per cent to 30.82 level. A further rise in the volatility index may result in a roller-coaster move for the market.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Reliance Industries, Shree Digvijay, Jubilant Foodworks, Ipca Laboratories and Gokul Refoils.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of ITC, SAIL, Adani Power, Infosys, JSW Steel, Aurobindo Pharma, Adani Ports, Tata Consultancy Sevices, Lupin, Sterlite Technologies, Godrej Consumer Products, IRCTC, Shipping Corporation, Spencer’s Retail, Bata India, Pidilite Industries, Mishra Dhatu Nigam, Indian Energy Exchange, NIIT Ltd., The Ramco Cements, Ircon International, Dixon Technologies, V-Guard Industries, Refex Industries and Bajaj Electricals, among others.
Most active stocks in value terms
Bajaj Finance (Rs 3960.08 crore) , IndusInd Bank (Rs 2911.93 crore) , RIL (Rs 2760.90 crore) , HDFC Bank (Rs 2045.86 crore) , Axis Bank (Rs 1918.39 crore) , SBI (Rs 1618.34 crore) , ICICI Bank (Rs 1592.38 crore) , Vodafone Idea (Rs 1410.60 crore) , RBL Bank Ltd. (Rs 1328.37 crore) and Kotak Bank (Rs 1133.08 crore) were among the most active stocks on Dalal Street on Friday in value terms.
Most active stocks in volume terms
Vodafone Idea (Shares traded: 150.22 crore) , Tata Motors (Shares traded: 9.29 crore) , SBI (Shares traded: 9.27 crore) , RBL Bank Ltd. (Shares traded: 8.35 crore) , BHEL (Shares traded: 7.30 crore) , IDFC First Bank (Shares traded: 7.10 crore) , IndusInd Bank (Shares traded: 5.74 crore) , PNB (Shares traded: 5.16 crore) , Federal Bank (Shares traded: 5.00 crore) and Ashok Leyland (Shares traded: 4.81 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Granules India, Network18 Media, Ruchi Soya Industries, Alok Industries and Vaibhav Global witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday signalling bullish sentiment.
Stocks seeing selling pressure
IL&FS Transportation Networks and Rajesh Exports witnessed strong selling pressure in Friday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, market breadth remained in favour of bears. As many as 235 stocks on the BSE 500 index settled the day in green, while 259 settled the day in red.
Podcast: What’s driving FII buying spree?
Although FIIs have been on a buying spree on Dalal Street and indices are rising taking cues from global markets, Nifty’s higher levels are failing to give confidence to analysts and investors alike. The dichotomy between the economy and market is growing and the bulls are showing fatigue at every opportunity. What does one read into these signs?
Source: ET Markets