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

NEW DELHI: As Nifty recovered most of its previous session’s losses on Friday it formed a bullish candle on the daily chart.

Manish Hathiramani of Deen Dayal Investments said while the markets spent some time above the psychological level of 11,000, the weakness in the index continues. “The resistance on the upside is at 11,300. Until that is not crossed, we cannot surmise that the short term bear trend has been completed and an upside rally will ensue. On the downside, the Nifty can fall to achieve the 10750 level,” he said.

Vinod Nair of Geojit Financial Services NSE 0.00 % said in spite of the rally, the market is expected to remain volatile and directionless in the absence of solid triggers. "Global cues will continue to be in focus as a resurgence in virus cases around the world leads to more restrictions and more pressure on the economic recovery,” he said.

Sanjeev Zarbade of Kotak Securities said the key events to be watched out in the near future would be the Covid-19 trajectory in India and abroad, progress on vaccine front and global market cues. “Stimulus measures, if any, in the US could provide support to the markets. If the market corrects from these levels, then investors should actively look for accumulating good quality stocks for long term wealth creation,” he said.

Nagaraj Shetti of HDFC Securities said any upside bounce up to 11,350-11,400 could be a sell on rise opportunity in the market and the expected decline from the highs could retest the lower 10,800 levels in the near term.

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

  • US stocks rose on Friday
    Tech stocks lifted the main indices more than 1%, but the Dow and the S&P 500 still posted their longest weekly losing streaks in a year as fears of a slowing economy sparked an almost month-long rout. The Dow Jones Industrial Average rose 358.52 points, or 1.34%, to 27,173.96 while the S&P 500 gained 51.87 points, or 1.60%, to 3,298.46.

  • European shares closed lower
    European stocks closed lower on Friday amid a choppy trading session as investors continued to monitor coronavirus developments and the prospects of economic recovery. The pan-European Stoxx 600 closed down by over 0.2%, having bounced either side of the flatline throughout the day. DAX fell 1.09 per cent, CAC40 fell 0.69 per cent but FTSE rose 0.34 per cent.

  • Tech View: Nifty forms bullish candle
    Nifty50 on Friday snapped a six-day losing streak in style. The index rebounded from its strong support at 10,800, where it had taken support on the previous day, and reclaimed the psychologically important 11,000 level. The 50-pack index formed a bullish candle on the daily chart and a bearish candle on the weekly chart.

  • F&O: Nifty trading range shifts to 10,800-11,300
    India VIX fell 12.06 per cent from 23.51 to 20.67 level, giving some comfort for a bounceback move. Options data suggested a wider trading range between 10,500 and 11,500 levels, while an immediate range has shifted to the 10,800-11,300 zone.

  • Stocks showing bullish bias
    Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Bhansali Engg, Indraprastha, Colgate Palmolive, Balkrishna Industries, KRBL, Thangamayil Jeweller, Huhtamaki PPL, Majesco, Vaishali Pharma, Mahindra CIE Auto, Wheels India and Transwarranty Finance among others.

  • Stocks signalling weakness ahead
    The MACD showed bearish signs on the counters of Lupin , Firstsource Solution, L&T Technology Services, Kopran, Gujarat Pipavav Port, Kajaria Ceramics, Skipper, Symphony, Visa Steel, V Mart Retail, KDDL and Bedmutha Industries among others.

  • Friday’s most active stocks
    RIL (Rs 2867.53 crore), TCS (Rs 1984.77 crore), Bajaj Finance (Rs 1933.87 crore), Dr. Reddy’s Labs (Rs 1792.92 crore), HCL Tech (Rs 1628.32 crore), Bharti Airtel (Rs 1466.39 crore), Infosys NSE 3.70 % (Rs 1328.55 crore), ZEEL (Rs 1185.13 crore) , HDFC Bank (Rs 1054.66 crore) and Cipla (Rs 1016.38 crore) were among the most active stocks on Dalal Street on Friday in value terms.

  • Friday’s most active stocks in volume terms
    Vodafone Idea (shares traded: 50.42 crore) , YES Bank NSE 3.09 % (shares traded: 11.28 crore), Ashok Leyland (shares traded: 10.83 crore), Tata Motors (shares traded: 6.50 crore), ZEEL (shares traded: 6.16 crore), Indiabulls Housing Finance (shares traded: 6.08 crore), BHEL (shares traded: 5.79 crore), GMR Infra (shares traded: 5.14 crore), IDFC First Bank (shares traded: 4.66 crore) and SBI (shares traded: 4.65 crore) were among the most traded stocks in the session.

  • Stocks seeing buying interest
    IndiaMART InterMESH, Coforge, Ruchi Soya Industries, Hathway Cable and Granules India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday signalling bullish sentiment.

  • Stocks seeing selling pressure
    Coal India, Delta Manufacturing, Future Lifestyle Fashions, Mittal Life Style and Kuantum Papers witnessed strong selling pressure in Friday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

  • Sentiment meter favours bulls
    Overall, market breadth remained in favour of bulls. As many as 436 stocks on the BSE 500 index settled the day in green, while 61 settled the day in red.

  • Podcast: How to buy on dips?
    After last week’s selloff, buy-on-dips is the common refrain among most analysts. But it’s easier said than done. Buy at how much dip, how do you know if a stock has dipped enough for you to buy? We find out this and more in this special podcast.

Source