Manish Hathiramani, technical analyst at Deen Dayal Investments said, “We should slide to 14,500, which should be the next level of support, failing which 14,300 would be the next target for the Nifty50. The resistance on the upside now stands at 15,100 and until we do not cross that, a rally can be utilized to short the Nifty for lower targets.”
“Rising economic restrictions due to the spike in virus cases and weak global cues hit the domestic market sentiment. The rate of market fall was aggravated by a sharp rise in volatility, being a monthly F&O expiry week. FPI inflows, which were leading the rally, slowed down due to global vulnerabilities from rising bond yields and inflation,” said Vinod Nair, Head of Research at
That said, here’s a look at what some of the key indicators are suggesting for Tuesday’s action:
US stocks fall as growth stocks slide
US stock indexes fell on Monday as climbing Treasury yields and prospects of rising inflation triggered valuation concerns, hitting shares of high-flying growth companies. Shares of Apple Inc, Microsoft Corp, Facebook Inc, Alphabet Inc, Tesla Inc, Netflix Inc and Amazon.com Inc resumed a fall from the previous week, falling between 0.6% and 2.1% in early trading. The Dow Jones Industrial Average was down 142.78 points, or 0.45%, at 31,351.54, the S&P 500 was down 23.54 points, or 0.60%, at 3,883.17 and the Nasdaq Composite was down 165.59 points, or 1.19%, at 13,708.88.
European shares drop on inflation risk concerns
European shares fell nearly 1% on Monday as hopes of a vaccine-led global economic recovery fuelled a rally in commodities and raised concerns over the risk of higher inflation. The pan-European STOXX 600 index was on course for its worst day this month, led by declines in technology companies and retail stocks.
Tech View: Nifty looks headed for 14,350
Nifty50 formed a large bearish candle on the daily chart on Monday and continued to make lower highs and lows for the fourth straight session. The index has already slipped below its 20-day moving average and analysts said there is a good chance that Nifty may test its 50-day simple moving average at 14,345 in the coming days. Independent analyst Manish Shah said Nifty has approached the 14,650-14,750 range, which was its previous swing high. He further said the index has retraced 38.2 per cent of the post-Budget rally. “If Nifty violates the 14,600 level and sustains below it, expect further decline towards 14,370-14,350 level. Any upside in the index could trigger selling around 14,750 level,” he said.
Check out the candlestick formations in the latest trading sessions
F&O: Spike in VIX signals weakness
India VIX moved up sharply by 14.47 per cent from 22.25 to 25.47 levels. A sudden spike in VIX along with sustained selling pressure has caused fear and worry for further decline in the market due to profit booking. There was Put writing at strike price 14,700, while significant unwinding was seen at strike price 15,000 and Call writing was seen 15,000 and 14,900 levels. Options data suggested a wider trading range between 14,300 and 15200 levels, while the immediate range was seen between 14,500 and 15,000 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Monday showed bullish trade setup on the counters of Firstsource Solution, Reliance Industries, MMTC, Sonata Software, Gravita India, Vivimed Labs, Indo Count Industries, Madhav Marbles & Granite, Shreyas Shipping, Dhampur Sugar, Zydus Wellness, Bhagyanagar India, IZMO, Future Enterprises, Brooks Laboratories, Renaissance Global, Saksoft, Seamec, Celebrity Fashions and Shah Alloys.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Axis Bank, Canara Bank, RBL Bank, REC, Manappuram Finance, Ambuja Cements, NCC, LIC Housing Finance, Tech Mahindra, Power Finance Corporation, Tata Motors, HDFC Life Insurance, Hudco, Bajaj Finance, Laurus Labs, Time Technoplast, Nippon Life AMC, Info Edge (India), Pidilite Industries, Bajaj Electricals, ACC, Bajaj Finserv, PNC Infratech, BEML, Orient Cement, Prince Pipes, Supreme Industries, Finolex Industries, KEC International, Astral Poly Technik, Symphony, Shree Cement, Sintercom India and JSW Holdings.
Monday’s most active stocks
HDFC Bank (Rs 2293.46 crore), RIL (Rs 2237.65 crore), SBI (Rs 2061.00 crore), Tata Steel (Rs 1933.42 crore), Tata Motors (Rs 1777.82 crore), ICICI Bank (Rs 1666.50 crore), TCS (Rs 1609.61 crore), Hindalco Industries (Rs 1475.72 crore), Axis Bank (Rs 1321.62 crore) and Bharti Airtel (Rs 1147.06 crore) were among the most active stocks on Dalal Street on Monday in value terms.
Monday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 24.44 crore), PNB (Shares traded: 20.79 crore), IDFC First Bank (Shares traded: 10.51 crore), Bank of Baroda (Shares traded: 7.56 crore), YES Bank (Shares traded: 7.54 crore), Central Bank of India (Shares traded: 6.23 crore), Tata Motors (Shares traded: 5.77 crore), IOB (Shares traded: 5.53 crore), SAIL (Shares traded: 5.31 crore) and SBI (Shares traded: 5.25 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Hindustan Copper, Vaibhav Global, Ratnamani Metal, Aditya Birla Capital and Vedanta witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Monday signalling bullish sentiment.
Stocks seeing selling pressure
HLE Glasscoat, Best Agrolife, Iris Clothings, Ravinder Heights, Sanwaria Consumer, Silly Monks Entertainment, Generic Engineering and Global Education witnessed strong selling pressure in Monday’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 119 stocks on the BSE 500 index settled the day in green, while 379 settled the day in red.
Podcast: Market may be in for more pain >>>
Monday’s stocks rout marked the fifth day of fall in the benchmark stock indices, and if one were to go by analyst projections, the benchmark indices may see another 3-5 per cent correction from here on. Sensex slipped below the 50,000 mark for the first time since February 2. The 30-pack index tanked 1,145 points, while its NSE counterpart Nifty fell 2 per cent to close at a sub-14,700 level. We spoke to Narendra Solanki of Anand Rathi Financial Services to explain the market behaviour.