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 index formed an indecisive candle on Thursday, similar to a ‘Doji’ candlestick on the daily chart. Such indecisive candle formations signal uncertainty going ahead while a doji kind of formation after four consecutive bearish candles is also seen as a likelihood of trend reversal.

Manish Hathiramani of Deen Dayal Investments said, the 13,700 level has acted as a good support for the Nifty50. “What needs to be seen is if we can keep above this level over the next few days. If we break 13,700, we could slide down to 13,500-13,600 and then to 13,200,” he added.

“Markets globally have turned weak following the steady decline in the mother market US. The heightened speculative activity in certain segments in US markets have become an area of concern. Back home, in India, the third day of consecutive selling by FIIs have turned the market mood bearish. The budget uncertainty will keep the bulls in restraint,” said VK Vijayakumar, Chief Investment Strategist 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 rise on big-tech strength
Wall Street’s main indexes rose on Thursday, as a reversal of declines in mega-cap technology stocks helped investors look past data which showed another sharp contraction in the US economy. The Dow Jones Industrial Average was up 334.78 points, or 1.10%, at 30,637.95, the S&P 500 was up 39.24 points, or 1.05%, at 3,790.01, and the Nasdaq Composite was up 93.42 points, or 0.70%, at 13,364.01.

European shares hit near 1-month low
European stocks hit a near one-month low, but soon erased losses and was back in the green following Wall Street’s worst sell-off since October on concerns about high valuations, with investors also growing wary about a rise in more contagious coronavirus variants. The pan-European STOXX 600 was up 0.22%, while major regional bourses like Germany’s DAX and France CAC 40 also erased losses.

Tech View: Doji candle on Nifty raises rebound hope
Nifty50 on Thursday formed a ‘Doji’ candle on the daily chart, as buying emerged at lows, helping the index settle above the 13,800 mark. While it is an indecisive candle, a Doji after a sharp drop gives hope of a trend reversal. A confirmation, though, will still be needed. The index closed the session at 13,817, down 149 points or 1.07 per cent. During the day, Nifty breached its 50-day simple moving average and also tested the 61.8 per cent retracement of the December-January rise at 13,750, a level that later offered some cushion.

Check out the candlestick formations in the latest trading sessions


F&O: Volatility to stay high till Budget
India VIX fell 0.41% from 24.39 to 24.29 level. A surge in volatility due to selling pressure and ahead of the Budget may keep the market volatile and limit the upside. On the options front, maximum Put open interest stood at 14,000 level followed by 13,000, while maximum Call OI stood at 14,500 followed by 15,000 levels. The options data suggested a wider trading range between 13,500 and 14,500 levels ahead of the Budget.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Thursday showed bullish trade setup on the counters of Tata Motors, Granules India, Dhani Services, Gujarat Ambuja Exports, Asian Granito India, IFB Agro Industries, Supreme Industries, Rane (Madras), Swan Energy, TV Today Network, Power Mech Projects, MAS Financial Services, Technocraft Industries, MPS, Hester Biosciences and Kirloskar Industries.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of IDFC First Bank, Tata Consultancy, Future Enterprises, SBI Cards and Payment Services, Madras Fertilizers, Emami, Centrum Capital, Pitti Engineering, ABB India, Surya Roshni, Sanco Industries, Redington (India), Nelco, Gulshan Polyols, Oriental Aromatics, GNA Axles, Bajaj Holdings & Investment, Hisar Metal Industries, Aakash Exploration, Sandhar Technologies, Uniphos Enterprises, Century Enka, Tree House Education, TVS Srichakra, Vaswani Industries and PDS Multinational Fashions.

Thursday’s most active stocks
Axis Bank (Rs 4192.04 crore), Tata Motors (Rs 3445.91 crore), RIL (Rs 2979.88 crore), HDFC Bank (Rs 2912.78 crore), Havells India (Rs 1718.68 crore), Bajaj Finance (Rs 1678.02 crore), Maruti Suzuki (Rs 1619.59 crore), ICICI Bank (Rs 1553.62 crore), SBI (Rs 1349.66 crore) and HDFC (Rs 1280.79 crore) were among the most active stocks on Dalal Street on Thursday in value terms.

Thursday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 45.59 crore), YES Bank (Shares traded: 31.28 crore), Bank of Baroda (Shares traded: 15.38 crore), PNB (Shares traded: 13.03 crore), Tata Motors (Shares traded: 12.92 crore), SAIL (Shares traded: 11.23 crore), Axis Bank (Shares traded: 6.43 crore), NALCO (Shares traded: 6.04 crore), Federal Bank (Shares traded: 5.71 crore) and IDFC First Bank (Shares traded: 5.01 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Havells India, Ceat, Suzlon Energy and ABB India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Thursday signalling bullish sentiment.

Stocks seeing selling pressure
Dangee Dums, Fairchem Organics, Jump Networks, Valiant Organics and Vishal Fabrics 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 201 stocks on the BSE 500 index settled the day in green, while 294 settled the day in red.

Podcast: Will Sitharaman’s Budget be market friendly? >>>
The day was marked by high volatility, which was nothing unusual, given the expiry of January series futures and options contracts. The fact that foreign outflows have intensified in recent days weighed further on FPI-heavy index heavyweights. The 535-odd drop for the day suggested that BSE benchmark Sensex has now fallen by 1 per cent or more in the last four sessions. For Nifty, the January F&O series ended just above 13,800. HUL dropped nearly 4 per cent as investors were concerned over the company’s focus on volumes over margins. We caught up with Vinod Nair of Geojit Financial Services to understand his views on the market.

Source link


Please enter your comment!
Please enter your name here