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

NEW DELHI: As Nifty ended the Tuesday’s volatile trading session on a flat note, it formed a bearish candle on the daily chart.
Chandan Taparia of Motilal Oswal Financial Services said the major trend of the index remains positive, and followup buying can trigger the next leg of rally.

“The index has to continue to hold above the 11,350 zone to witness an upmove towards 11,600 while on the downside, the medium-term support has shifted to 11,300-11,250 zones,” he said.

Vinod Nair of Geojit Financial Services said the market is trading with uncertainty due to lack of domestic triggers so investors are advised to remain cautious and keep booking profits whenever possible.

Ajit Mishra of Religare Broking said the recent buoyancy in the banking space is helping the index to inch higher while other index heavyweights are seeing a pause.

“We reiterate our bullish view on markets and suggest continuing with the “buy on dips” approach,” he said.
That said here’s a look at what some of the key indicators are suggesting for Wednesday’s action:

US stocks muted as Apple overshadows positive trade deal cues
Wall Street’s main indexes slipped on Tuesday following a three-day rally as a drop in Apple shares overshadowed optimism from remarks made by U.S. and China officials in pledging firm commitment to a Phase One trade deal. The Dow Jones Industrial Average was down 85.39 points, or 0.30%, at 28,223.07, the S&P 500 was down 1.85 points, or 0.05%, at 3,429.43. The Nasdaq Composite was down 17.34 points, or 0.15%, at 11,362.38.

European shares rise on trade hopes, German data
Renewed optimism over a U.S.-China trade deal and a smaller-than-expected decline in German economic output fuelled gains in European stocks on Tuesday, with Frankfurt shares hitting a one-month high. The pan-European STOXX 600 index rose 0.4%, extending Monday’s gains, which were driven by positive updates on COVID-19 treatment efforts.

Tech View: Nifty forms bearish candle
NEW DELHI: Nifty50 could not capitalise on a positive opening on Tuesday, but saw buying interest intraday on every dip. The NSE barometer eventually ended up forming a small bearish candle on the daily chart. Analysts said the index continued to form higher high and low even as supports shifted higher. As long as the index trades above the 11,350 level, analysts expect the bias to remain positive.

Check out the candlestick formations in the latest trading sessions

F&O: VIX cooling down suggests a bullish stance
India VIX moved up 2.04 per cent to 19.62 level. Volatility is gradually cooling down on a week-on-week basis, which suggests a bullish stance. The buy-on-decline strategy can continue in this market. Options data suggested a trading range between 11,300 and 11,600 levels for the coming few days.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of Axis Bank, Bajaj Finance, Rallis India, ICICI Securities, Can Fin Homes, Religare Enterprises, AVT Natural Products, Aegis Logistics, Kiri Industries, Indo Count Industries, Dhanuka Agritech, Asian Granito India, Visaka Industries, Ceat, Motilal Oswal Financial Services, Saregama India, Saksoft, Autolite (I), P&> Hygiene & Health and Hester Biosciences among others.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Tata Steel, Apollo Tyres, UPL, Just Dial, Hindustan Copper, Welspun India, Albert David, Shalby, Kansai Nerolac Paint, Eris Lifesciences, 20 Microns, Mold-Tek Packaging, Tarmat, BF Investment, Gulshan Polyols, Shreyas Shipping, Greenlam Industries and Asian Hotels (West). Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Tuesday’s most active stocks
Bajaj Finance (Rs 3526.70 crore) , SBI (Rs 2172.17 crore) , ICICI Bank (Rs 2050.61 crore) , RIL (Rs 1868.24 crore) , HDFC Bank (Rs 1540.50 crore) , Adani Enterprises (Rs 1414.85 crore) , LIC Housing Finance (Rs 1300.94 crore) , Axis Bank (Rs 1188.64 crore) , Tata Motors (Rs 1129.16 crore) and Eicher Motors (Rs 1052.64 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.

Tuesday’s most active stocks in volume terms
YES Bank (shares traded: 20.61 crore) , Vodafone Idea (shares traded: 15.71 crore) , SBI (shares traded: 10.53 crore) , Tata Motors (shares traded: 9.02 crore) , ICICI Bank (shares traded: 5.31 crore) , NTPC (shares traded: 5.09 crore) , Adani Enterprises (shares traded: 4.93 crore) , SAIL (shares traded: 4.83 crore) , IDFC First Bank (shares traded: 4.65 crore) and Tata Power (shares traded: 4.56 crore) were among the most traded stocks in the session.

Stocks seeing buying interest
Adani Enterprises, Max Financial Services, Affle (India), Rallis India and Timken India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.

Stocks seeing selling pressure
Silly Monks Entertainment and Minda Industries Limited – Rights Entitlement witnessed strong selling pressure in Tuesday’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 208 stocks on the BSE 500 index settled the day in green, while 288 settled the day in red.

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Dalal Street swung between gains and losses on Tuesday, causing the benchmark equity indices to fluctuate through the day amid firm global cues. Nifty eventually closed flat, while Sensex ended in the green for the third straight session, propelled by the financial names. We caught up with Ajit Mishra of Religare Broking to try and understand the market undercurrent.
Credit: Stocks-Markets-Economic Times

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