Chandan Taparia, Technical & Derivative Analyst at MOFSL said, as long as Nifty remains below 14,850 level, weakness can continue and take Nifty towards the next key support at 14,600 and 14,500 levels, while on the upside, hurdles are seen at 15,000 and 15,150 levels.
“The expectation of strong global recovery as prompted by rising international commodity prices helped the market, but was tempered due to elevated bond yield and virus cases. Consequently, volatility has increased in the domestic front, but broad markets continue to be attracted with themes like mid & smallcaps, cyclicals, energy, PSUs, metals and industries,” 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 Wednesday’s action:
Slide in growth stocks pummel US stocks
The Nasdaq index fell more than 2% on Tuesday as investors sold off mega-cap growth stocks on valuation concerns, while keeping a close eye on Federal Reserve Chairman Jerome Powell’s testimony in Congress. The Dow Jones Industrial Average was down 184.17 points, or 0.58%, at 31,337.52, the S&P 500 was down 40.54 points, or 1.05%, at 3,835.96, and the Nasdaq Composite was down 329.36 points, or 2.43%, at 13,203.69.
European shares fall on bleak earnings
European shares reversed early gains to trade lower on Tuesday as mixed corporate earnings updates overshadowed a boost from strong commodity prices, while British bank HSBC fell after abandoning its long-term profitability targets. The benchmark euro zone stock index was down 0.64%. Tech and healthcare stocks fell the most, while oil and gas and travel shares gained nearly 1%.
Tech View: Nifty support stays at 14,600
Nifty50 topped the 14,850 level on Tuesday, before paring most of the gains. The index snapped a five-day losing streak, but continued to make lower highs for the fifth straight session. It also made a failed attempt to take out the 20-day moving average. Nifty eventually ended up forming an Inside Bar pattern on the daily chart. This pattern appeared after a long bearish candle on Monday. Analysts said the 14,600 level may continue to support the index. Upside hurdles are now seen in the 14,850-14,900 zone, they said.
Check out the candlestick formations in the latest trading sessions
F&O: Higher VIX is keeping the market in roller-coaster mode
India VIX fell 0.95% from 25.47 to 25.22. Overall, a higher VIX is keeping the market in roller-coaster mode and limiting the upside. There was Put writing at strike prices 14,700 and 14,600 while Call writing was seen at 14,800 and 14,700 levels followed by unwinding at 15,500. Options data suggested a wider trading range between 14,300 and 15,200 levels, while the immediate range is seen between 14,500 and 15,000 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of HBL Power Systems, Snowman Logistics, Bombay Dyeing, Zuari Agro Chemicals, Sastasundar Ventures, Westlife Development, Muthoot Capital, Jindal Stainless (Hisar), Dishman Carbogen Amcis, Ester India, Matrimony.com, Supreme Industries, Vaswani Industries, Madhav Copper, Astec Lifesciences, Ponni Sugars (Erode) and Bannari Amman Sugars.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of SBI, Indiabulls Housing Finance, IndusInd Bank, NHPC, Kotak Mahindra Bank, Karnataka Bank,
, Prism Johnson, JK Paper, Dr. Lal Pathlabs, Can Fin Homes, Kajaria Ceramics, Strides Pharma Science, J B Chemicals & Pharmaceuticals, Shoppers Stop, Century Enka, SKF India, Lux Industries, , Blue Dart Express, Crisil, Agro Tech Foods and Poddar Pigments.
Tuesday’s most active stocks
Tata Motors (Rs 4263.13 crore), Tata Steel (Rs 2773.76 crore), RIL (Rs 2407.77 crore), SBI (Rs 1797.78 crore), Hindalco Industries (Rs 1667.33 crore), ICICI Bank (Rs 1449.40 crore), HDFC Bank (Rs 1401.89 crore), Bharti Airtel (Rs 1332.36 crore), Axis Bank (Rs 1215.57 crore) and Bajaj Finance (Rs 1187.87 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.
Tuesday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 22.88 crore), PNB (Shares traded: 21.79 crore), Tata Motors (Shares traded: 13.33 crore), SAIL (Shares traded: 10.03 crore), ONGC (Shares traded: 9.09 crore), Reliance Power (Shares traded: 8.08 crore), Bank of Baroda (Shares traded: 6.86 crore), Suzlon Energy (Shares traded: 6.68 crore), YES Bank (Shares traded: 6.52 crore) and IDFC First Bank (Shares traded: 6.13 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Hindustan Copper, Sundaram Finance, Westlife Development, Tata Steel and
witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.
Stocks seeing selling pressure
Best Agrolife, Akg Exim, Global Education, Novartis India, Ravinder Heights, Sanwaria Consumer and Valiant Organics witnessed strong selling pressure in Tuesday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Overall, market breadth remained in favour of bulls. As many as 307 stocks on the BSE 500 index settled the day in green, while 187 settled the day in red.
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Investors on Tuesday turned jittery at highs and despite a good start, domestic indices erased gains to settle flat. The only silver lining was, they snapped a 5-day losing streak. Sensex ended above 49,750 while Nifty topped 14,700. We spoke to Ajit Mishra of Religare Securities to share his views on the market.