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

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

NEW DELHI: Nifty made a gap up opening and hit its new all-time high on Thursday before seeing a bout of profit booking, to end below the previous session’s close. The headline index formed a bearish candle for the day. On the other hand, the BSE Sensex touched 50,000 milestone in the opening trade. The bluechip index took just 208 days to double from its 52-week low of 25,000 levels.

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said, “We witnessed nervousness around the 14,750 levels and the Nifty erased all its gains to close in the red. However, the trend continues to remain positive and we still have a pending target of 14,800-14,900.”

“The market is expected to maintain its momentum and remain expensive given ample liquidity and high earnings growth. Going ahead, the domestic market will keep a track on high Budget expectations and global market, which will focus on the policies to be adopted by the new president of the US,” said Vinod Nair, Head of Research at Geojit Financial Services.

That said, here’s a look at what some of the key indicators are suggesting for Friday’s action:
US stocks hover near record highs after Biden bounce

Wall Street’s main indexes hovered near record highs on Thursday as investors counted on more pandemic relief and speedy vaccine rollouts under the Biden administration to support the economy after data showed a weakening labor market recovery. The Dow Jones Industrial Average rose 41.6 points, or 0.13% to 31,229.88. The S&P 500 rose 7.6 points, or 0.21% to 3,859.77, while the Nasdaq Composite rose 73.2 points, or 0.55%, to an all-time high of 13,531.09.

European shares extend gains on US stimulus hope
European stocks extended gains on Thursday on hopes of a large U.S. stimulus plan under new President Joe Biden, while investors looked to the European Central Bank (ECB) for clues on the eurozone’s economic health. The pan-European STOXX 600 index rose 0.56%, hitting new highs since February, with automakers banks and industrial companies gaining the most.

Tech View: Nifty forms Dark Cloud Cover
Nifty50 on Thursday erased intraday gains as it settled below the 14,600 mark, forming what looked like a Dark Cloud Cover candle on the daily chart. A Dark Cloud Cover is formed when the index opens higher, but closes below the midpoint of the previous session’s candle body. A short-term reversal in the index can be confirmed if Nifty50 closes below the 14,500 level on Friday, said Mazhar Mohammad of Chartviewindia.in.

Check out the candlestick formations in the latest trading sessions


F&O: Volatility may remain higher ahead of Budget
India VIX slipped 5.90 per cent from 22.89 to 21.55 levels. Volatility needs to cool down below 20 mark to commence a fresh leg of rally to go into a new lifetime high. However, volatility could be comparatively higher ahead of the Union Budget. There was Call writing at 15,000 and then 14,800 levels, while there was Put writing at 14,600 and the 14,500 levels. Options data suggested a wider trading range between 14,200 and 15,000 levels, while the immediate trading range lies between 14,500 and 14,800 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Thursday showed bullish trade setup on the counters of Tata Steel, Crompton Greaves Consumer Electricals, Future Retail, Laurus Labs, Polycab India, Pitti Engineering, Gabriel India, Pricol, EID Parry, Adani Green Energy, SML Isuzu, KEI Industries, Dhani Services, Somany Ceramics, PNB Housing Finance, Visaka Industries, Vertoz Advertising, Solara Active Pharma, PTL Enterprises, Future Market Network, Future Lifestyle, KSB, Future Supply Chain, Suumaya Lifestyle, Ganesh Housing, Praxis Home Retail and Hitech Corporation.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of SBI, Trident Ltd, Indian Oil Corp, HFCL, Ambuja Cements, Rail Vikas Nigam, Tata Chemicals, Indian Bank, Adani Power, Castrol India, Kellton Tech Solutions, Himadri Speciality, Man Industries, Sanghi Industries, Torrent Power, ACC, Equitas Holdings, Arvind, Container Corporation of India, Tinplate Company, Siemens, United Breweries, PNC Infratech, Sumitomo Chemical, Kaveri Seed Company, Xchanging Solutions, Setco Automotive, Dilip Buildcon, Asian Granito India, Satin Creditcare, Eris Lifesciences, Nesco, Shreyas Shipping, Alkem Laboratories, Hi-Tech Pipes, Ajanta Pharma, Anjani Portland, Steel Strips Wheels, Poly Medicure, IIFL Wealth Management, Emami Realty, Premier Polyfilm, Sakar Healthcare, Tokyo Plast International, BayerCropscience, P&G Hygiene & Health, Kennametal India, Wendt India and Shah Alloys.

Most active stocks in value terms
Tata Motors (Rs 8263.67 crore), RIL (Rs 3792.90 crore), Bajaj Finance (Rs 3636.48 crore), Havells India (Rs 2611.57 crore), HDFC Bank (Rs 1947.61 crore), Bajaj Finserv (Rs 1520.59 crore), Asian Paints (Rs 1376.69 crore), Bandhan Bank (Rs 1224.75 crore), Apollo Tyres (Rs 1108.91 crore) and Tata Steel (Rs 1093.11 crore) were among the most active stocks on Dalal Street on Thursday in value terms.

Most active stocks in volume terms
Tata Motors (Shares traded: 28.36 crore), Vodafone Idea (Shares traded: 27.55 crore), YES Bank (Shares traded: 22.94 crore), PNB (Shares traded: 12.63 crore), JK Tyre (Shares traded: 7.05 crore), BHEL (Shares traded: 5.66 crore), IDFC First Bank (Shares traded: 5.59 crore), Bank of Baroda (Shares traded: 5.35 crore), Apollo Tyres (Shares traded: 5.13 crore) and Federal Bank (Shares traded: 4.90 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Havells India, Sundaram Clayton, Ceat, V-Guard and Apollo Tyres witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Thursday signalling bullish sentiment.

Stocks seeing selling pressure
Antony Waste Handling Cell, Mrs. Bectors Food Specialities, Jump Networks, Vishal Fabrics and Wealth First Portfolio Managers witnessed strong selling pressure in Thursday’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 139 stocks on the BSE 500 index settled the day in green, while 357 settled the day in red.

Podcast: How should investors position themselves after recent gains? >>>
Concerns over a massive fire at Covid drug maker Serum Institute’s Pune plant weighed on sentiment, as the BSE Sensex came crashing after hitting the 50,000-mark on Thursday. Later reports emerged that the impacted unit was making BCG vaccines and not Covid, leading to some recovery in the end. The BSE index eventually settled 167 points lower, with the NSE barometer Nifty ending below 14,600. We caught up with Vinod Nair of Geojit Financial Services to know his views on the market.

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