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

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

NEW DELHI: Nifty on Wednesday formed a ‘Shooting Star’ candle on the daily chart, prompting analysts to say it’s now a ‘sell on rise’ market.

Deepak Jasani of HDFC Securities said technically, with Nifty facing a sharp selloff from the day’s high, the bears seem to have an upper hand. “Further downsides are likely once the immediate support of 10,577 is broken. Any pullback rallies could hit a wall at 10,712,” he said.

Sahaj Agrawal of Kotak Securities said Nifty has been consolidating in the 10,550-10,900 range and has a strong support at 10,550, above which it should trade strong. “Only a breach of this level is expected to trigger selling pressure,” he said.

Siddhartha Khemka of Motilal Oswal said the market should now consolidate in near term, given the persistent rise in virus cases and implementation of fresh lockdowns in certain parts of the country. “Further, the ongoing earnings season should keep the market volatile. Even technically, Nifty has broken its rising support trend line and could continue to decline towards the 10,500-10,450 zone,” he said

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

US shares rises on vaccine progress

Wall Street gained on Wednesday with the S&P 500 nearing its highest in more than four months following a strong quarterly showing by Goldman Sachs and promising early data for a potential COVID-19 vaccine. At 7:08 pm (IST), the Dow Jones Industrial Average was up 264.92 points, or 0.99 per cent, at 26,907.51, the S&P 500 was up 25.78 points, or 0.81 per cent, at 3,223.30, and the Nasdaq Composite was up 49.05 points, or 0.47 per cent, at 10,537.62.

European shares gain on vaccine hopes
European shares rebounded on Wednesday from losses in the previous session following reports of progress in developing a COVID-19 vaccine, but a mixed bag of quarterly earnings reports capped gains. The pan-European STOXX 600 rose 0.9 per cent, with growth-sensitive sectors such as travel & leisure, miners and industrial companies leading gains.

Tech View: Analysts say sell on rise
Nifty50 on Wednesday failed to capitalise on its gap-up start, as the index lost ground after touching the 78.6 per cent Fibonacci retracement level of the recent fall. The index formed a ‘Shooting Star’ candle on the daily chart. Analysts said it’s a ‘sell on rise’ market and one should watch out for the immediate support in the 10,550-10,562 range.

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F&O: Nifty trading range at 10,450-10,850
India VIX fell 1.31 per cent to 26.29 level. However, overall lower volatility is ruling out any major decline, but suggests limited upside. Options data suggested an immediate trading range between 10,450 and 10,850 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Wednesday showed bullish trade setup on the counters of Wipro, Aurobindo Pharma, Eveready Industries, Fortis Healthcare, Bharat Forge, Hexaware Technologies, S H Kelkar & Company, Rallis India, KPIT Technologies, Dr. Reddy’s Labs, BF Utilities, India Tourism, Aarti Drugs, Oracle Financial Services, ICRA, Hester Biosciences, Creative Peripherals, Universus Photo Image, Pilani Investments, Apollo Sindoori and MRO-TEK Realty.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of SBI, Jindal Steel & Power, Bharat Electronics, Bajaj Finance, Tata Steel, Ujjivan Financial, United Spirits, Jai Corp Ltd., HUDCO, Phillips Carbon, Max Financial Services, Escorts, Amara Raja Batteries, Astra Microwave, Thomas Cook, GSFC, Sunteck Realty, GHCL, National Fertilizers, Navkar Corporation, Gujarat Narmada Valley, Central Depository, Aditya Birla Money, Mirza International, Snowman Logistics, Camlin Fine Sciences, Kamat Hotels, Manali Petrochem, Hindustan Aeronautics, Aarti, CESC, Banco Products, NCL Industries and Capri Global Capital. 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 12347.62 crore) , Bajaj Finance (Rs 3555.03 crore) , Wipro (Rs 3356.42 crore) , Infosys (Rs 2491.13 crore) , Axis Bank (Rs 1878.95 crore) , TCS (Rs 1240.64 crore) , Bharti Airtel (Rs 1131.77 crore) , IndusInd Bank (Rs 1128.09 crore) , HDFC Bank (Rs 1118.78 crore) and SBI (Rs 1093.97 crore) were among the most active stocks on Dalal Street on Wednesday 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: 47.55 crore) , Wipro (shares traded: 13.03 crore) , Reliance Power (shares traded: 9.29 crore) , BHEL (shares traded: 6.89 crore) , RIL (shares traded: 6.44 crore) , SBI (shares traded: 5.85 crore) , Suzlon Energy (shares traded: 5.32 crore) , Tata Motors (shares traded: 4.97 crore) , Federal Bank (shares traded: 4.51 crore) and Axis Bank (shares traded: 4.32 crore) were among the most traded stocks in the session.

Stocks seeing buying interest

Suven Pharma , Infosys, MphasiS, HCL Tech and Persistent Systems witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Wednesday signalling bullish sentiment.

Stocks seeing selling pressure
Aarti Surfactants, B.C. Power Controls, Mittal Life Style and Omaxe witnessed strong selling pressure in Wednesday’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 187 stocks on the BSE 500 index settled the day in green, while 309 settled the day in red.

Podcast: Did RIL blow hurt Nifty or is it structural weakness?
Sensex gave up some 758-point gains from the day’s high due to fag-end selling in the index heavyweights RIL, Bharti Airtel and HDFC Bank. However, some buying IT majors Infosys and TCS managed to keep the index in the green. Investors gave a thumbs-down to RIL’s 43rd AGM outcome and the stock fell 3.71 per cent. So, was disappointment over RIL’s failure to get the Aramco deal through did the damage, or the market is actually seeing structural weakness? Listen in >>>

Source: ET Markets

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