Ahead of Market: 10 things that will decide D-Street action on Tuesday
Nifty on Monday fell 161 points to form a bearish Engulfing pattern on the daily charts to hint at short-term top reversal for the market. The short-term trend of Nifty seems to have turned down and the next lower levels to be watched are around 22,100-22,050 levels.
Indian shares fell on Monday, weighed down by a decline in banking and Tata Group stocks, while investors booked profits ahead of key domestic and US inflation data. The blue-chip NSE Nifty 50 shed 0.72% to 22,332, while the BSE Sensex settled 0.83% lower at 73,502.
Here's how analysts read the market pulse:
"Nifty has been fluctuating within an Ascending Channel, displaying a pattern of higher highs and higher lows. The overall trend continues to be bullish, although there is currently an intermediate corrective phase in progress. In the short term, Nifty could experience weakness, possibly leading to a decline toward the range of 22,200-22,250. Looking at the upside, immediate resistance is identified at 22,400 based on closing prices," said Rupak De, Senior Technical Analyst, LKP Securities.
Tejas Shah, JM Financial & BlinkX, "Nifty is facing a lot of resilience around 22,500-525 levels on an immediate basis for the past couple of days and there is clearly a tug of war between the bulls and the bears for this make or break resistance level. As long as Nifty is holding above 22,000, there is no major sense of panic as of now. Supports for Nifty are now seen at 22,250-300 and 22,000 levels. On the higher side, immediate resistance for Nifty is at 22,500-525 levels and the next resistance is at 22,700 mark."
That said, here’s a look at what some key indicators are suggesting for Tuesday's action:
All three major U.S. stock indexes had ended the week lower on Friday, with the S&P 500 and Nasdaq coming off record highs as high-flying chip stocks fell and a labor market report showed more new jobs than expected, while the unemployment rate rose unexpectedly.
At 9:39 a.m. ET, the Dow Jones Industrial Average was down 75.72 points, or 0.20%, at 38,646.97, the S&P 500 was down 9.74 points, or 0.19%, at 5,113.95, and the Nasdaq Composite was down 21.81 points, or 0.14%, at 16,063.31.
Information technology led losses across the major S&P 500 sectors, down 0.4%, while communication services fell 0.2%.
Megacap stocks such as Microsoft and Amazon.com eased 0.8% and 1.0%, respectively, and were among the biggest weights on the S&P 500.
The pan-European STOXX 600 was down 0.5% by 9:41 GMT, and on track for its biggest one-day percentage drop in a month if losses held.
Technology index dropped 1.7%, leading sectoral declines, following a 7.9% decline in BE Semiconductor Industries' shares.
The chipmaking parts supplier tumbled to the bottom of STOXX 600 on worries over potential delays in hybrid bonding adoption.
Nifty on Monday fell 161 points to form a bearish Engulfing pattern on the daily charts to hint at short-term top reversal for the market.
The short-term trend of Nifty seems to have turned down and the next lower levels to be watched are around 22,100-22,050 levels. Intraday resistance is at 22,525, Nagaraj Shetti of HDFC Securities said.
The MACD is known for signalling 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.
Tata Steel (Shares traded: 5.4 crore), HDFC Bank (Shares traded: 2.5 crore), Power Grid (Shares traded: 1.9 crore), ITC (Shares traded: 1.7 crore), SBI (Shares traded: 1.7 crore), ICICI Bank (Shares traded: 1.3 crore), and ONGC (Shares traded: 1 crore) were among the most traded stocks in the session on NSE.
Shares of Cipla, Grasim Industries, Bharti Airtel, Sun Pharma, Bajaj Auto, and Tata Consumer Products among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Shares of IIFL Finance, GMM Pfaudler, Sterlite Tech, Campus Activewear, Orient Refractories, Sharda, Cropchem, and Polyplex Corporation hit their 52-week lows, signalling bearish sentiment on the counters
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
"Nifty has been fluctuating within an Ascending Channel, displaying a pattern of higher highs and higher lows. The overall trend continues to be bullish, although there is currently an intermediate corrective phase in progress. In the short term, Nifty could experience weakness, possibly leading to a decline toward the range of 22,200-22,250. Looking at the upside, immediate resistance is identified at 22,400 based on closing prices," said Rupak De, Senior Technical Analyst, LKP Securities.
Tejas Shah, JM Financial & BlinkX, "Nifty is facing a lot of resilience around 22,500-525 levels on an immediate basis for the past couple of days and there is clearly a tug of war between the bulls and the bears for this make or break resistance level. As long as Nifty is holding above 22,000, there is no major sense of panic as of now. Supports for Nifty are now seen at 22,250-300 and 22,000 levels. On the higher side, immediate resistance for Nifty is at 22,500-525 levels and the next resistance is at 22,700 mark."
That said, here’s a look at what some key indicators are suggesting for Tuesday's action:
US market
's main stock indexes dipped on Monday, as investors awaited key inflation data this week that could provide cues on the U.S. Federal Reserve's monetary policy path after a mixed jobs report last week.All three major U.S. stock indexes had ended the week lower on Friday, with the S&P 500 and Nasdaq coming off record highs as high-flying chip stocks fell and a labor market report showed more new jobs than expected, while the unemployment rate rose unexpectedly.
At 9:39 a.m. ET, the Dow Jones Industrial Average was down 75.72 points, or 0.20%, at 38,646.97, the S&P 500 was down 9.74 points, or 0.19%, at 5,113.95, and the Nasdaq Composite was down 21.81 points, or 0.14%, at 16,063.31.
Information technology led losses across the major S&P 500 sectors, down 0.4%, while communication services fell 0.2%.
Megacap stocks such as Microsoft and Amazon.com eased 0.8% and 1.0%, respectively, and were among the biggest weights on the S&P 500.
European shares
European shares moved lower on Monday, hurt by a sell-off in technology and resource stocks, and cautious trading ahead of a key U.S. inflation report due this week.The pan-European STOXX 600 was down 0.5% by 9:41 GMT, and on track for its biggest one-day percentage drop in a month if losses held.
Technology index dropped 1.7%, leading sectoral declines, following a 7.9% decline in BE Semiconductor Industries' shares.
The chipmaking parts supplier tumbled to the bottom of STOXX 600 on worries over potential delays in hybrid bonding adoption.
Tech View: Bearish engulfing pattern
Nifty on Monday fell 161 points to form a bearish Engulfing pattern on the daily charts to hint at short-term top reversal for the market.The short-term trend of Nifty seems to have turned down and the next lower levels to be watched are around 22,100-22,050 levels. Intraday resistance is at 22,525, Nagaraj Shetti of HDFC Securities said.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence () showed bullish trade on the counters of Linde India, REC, Colgate-Palmolive, Power Finance Corporation, Asian Paints, and Divid Labs among others.The MACD is known for signalling 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 KEC International, Supreme Industries, Tube Investments, M&M, Bosch, and Triveni Turbine among others. A bearish crossover on the MACD on these counters indicates that they have just begun their downward journey.Most active stocks in value terms
HDFC Bank (Rs 3,617 crore), RIL (Rs 1,663 crore), ICICI Bank (Rs 1,439 crore), SBI (Rs 1,306 crore), Infosys (Rs 1,081 crore), TCS (Rs 950 crore), and Tata Steel (Rs 835 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 the highest trading turnovers in the day.
Most active stocks in volume terms
Tata Steel (Shares traded: 5.4 crore), HDFC Bank (Shares traded: 2.5 crore), Power Grid (Shares traded: 1.9 crore), ITC (Shares traded: 1.7 crore), SBI (Shares traded: 1.7 crore), ICICI Bank (Shares traded: 1.3 crore), and ONGC (Shares traded: 1 crore) were among the most traded stocks in the session on NSE.
Stocks showing buying interes
Shares of Cipla, Grasim Industries, Bharti Airtel, Sun Pharma, Bajaj Auto, and Tata Consumer Products among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
Shares of IIFL Finance, GMM Pfaudler, Sterlite Tech, Campus Activewear, Orient Refractories, Sharda, Cropchem, and Polyplex Corporation hit their 52-week lows, signalling bearish sentiment on the countersSentiment meter favours bears
Overall, market breadth favoured bears as 3,095 stocks ended in the red, while 876 names settled in the green.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Source: Stocks-Markets-Economic Times
