Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said, “If we manage to get past this level, we should be headed to 14,800-14,900. The index has made a strong base at the 14,200 levels, which acted as good support.”
“Going ahead, earnings and global cues would remain on the participants’ radar. Besides, we’re also seeing noticeable buzz across the sectors in run up to Budget. We feel it would be prudent for the markets to spend some time around the current levels. Meanwhile, there’ll be no shortage of trading and investment opportunities, thanks to prevailing earnings season and upcoming budget. Amid all, we suggest not to go overboard and stick to the quality names and accumulate them on dips,” said Ajit Mishra, VP – Research, Religare Broking.
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
US stocks rise ahead of Yellen speech
Wall Street’s main indexes rose on Tuesday after upbeat earnings from big U.S. banks and Halliburton, while investors awaited a speech from U.S. Treasury Secretary nominee Janet Yellen that is expected to advocate hefty fiscal spending. The Dow Jones Industrial Average rose 227.19 points, or 0.74%, to 31,041.45, the S&P 500 gained 29.87 points, or 0.79%, to 3,798.12 and the Nasdaq Composite gained 133.96 points, or 1.03%, to 13,132.46.
European shares turn defensive on lockdown worries
European stocks inched higher on Tuesday, as possible extension of German lockdowns drew investors into defensive sectors such as healthcare and telecoms. After gaining almost half a percent at the open, the pan-European STOXX 600 index fell 0.06%, while Germany’s DAX and London’s blue-chip index fell 0.06% each.
Tech View: Nifty eyes 14,560 level
Nifty50 on Tuesday formed a strong bullish candle on the daily scale and negated the formation of lower highs. The index topped the 14,500 level comfortably, with analysts now projecting that a level above 14,560 level can open up the doors for more gains towards the 14,650-14,800 range. “The index has seen a sharp retracement of the recent fall. It retraced more than 61.8 per cent of the fall and is now headed towards the 78.6 per cent retracement mark, which is near the 14,560 level. The overall structure indicates that Nifty can still consolidate further, before commencing a larger rally,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan.
Check out the candlestick formations in the latest trading sessions
F&O: VIX likely to be higher ahead of Budget 2021
India VIX slipped 6.16 per cent from 24.39 to 22.89 levels. Volatility needs to cool down below 20 level to commence a fresh leg of rally for a new lifetime high. However, volatility could be comparatively higher ahead of Budget 2021. There was Call writing at strike price 15,000 and then 14,700, while Put writing was seen at 14,400 and unwinding at 13,500 levels. Options data suggested a wider trading range between 14,000 and 14,800 levels, while the immediate trading range is seen between 14,300 and 14,700 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of DCW, Network 18 Media, Kellton Tech Solutions, Kriti Nutrients, Trescon, Vishwaraj Sugar Industries, Hatsun Agro Product, Indo Count Industries, Century Enka, BCL Enterprises, DCM Shriram, ABB India, Oriental Aromatics, Prabhat Dairy, Bajaj Auto, Coromandel International, Max Ventures and Industries, Aarvee Denims and Exports, Royale Manor Hotels, Minda Industries, Future Enterprises, Sheela Foam, Oriental Carbon, Godrej Agrovet, Jetking Infotrain, Mayukh Dealtrade, Krishna Ventures, Tube Investments, Safari Industries, Hindusthan Urban Infra, Shree Metalloys, Jay Ushin Ltd, Stanrose Mafatlal, S R Industries and Mansi Finance.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of 3i Infotech, Urja Global, Arvind Ltd, Coal India, Take Solutions, Indian Hotels Company, Parle Industries, Infosys, Reliance Infrastructure, Karnataka Bank, IndusInd Bank, Inox Leisure, Filatex India, Super Crop Safe, HLV Ltd, Oil India Ltd., SPIC, JK Paper, Apollo TriCoat Tubes, Sarla Performance Fibers, ASI Industries, Prozone Intu Properties, Bharat Seats, Dhani Services, Maruti Suzuki India, Bajaj Healthcare, Acrysil Ltd, Aditya Birla Money, Jain Irrigation, MphasiS Ltd, L&T Infotech, HDFC AMC, APL Apollo Tubes and Atul Ltd.
Tuesday’s most active stocks
Info Edge (Rs 200.03 crore), Tata Motors (Rs 163.82 crore), UltraTech Cem. (Rs 123.01 crore), Vodafone Idea (Rs 119.70 crore), RIL (Rs 119.53 crore), HDFC Bank (Rs 106.38 crore), Bajaj Finance (Rs 82.85 crore), SBI (Rs 54.55 crore), Tata Steel (Rs 54.47 crore) and Bombay Dyeing (Rs 49.14 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: 8.97 crore), Vikas Multicorp (Shares traded: 1.93 crore), YES Bank (Shares traded: 1.93 crore), Indian Info Sof (Shares traded: 1.78 crore), RattanIndia Power (Shares traded: 1.76 crore), SITI Networks (Shares traded: 0.88 crore), Suzlon Energy (Shares traded: 0.85 crore), JP Power (Shares traded: 0.82 crore), PNB (Shares traded: 0.72 crore) and Trident Ltd (Shares traded: 0.68 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Bank of Maharashtra, IDFC First Bank, Tata Elxsi, Narayana Hrudayalaya and Ceat witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.
Stocks seeing selling pressure
Godha Cabcon & Insulation, Jump Networks and Vishal Fabrics witnessed strong selling pressure in Tuesday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 443 stocks on the BSE 500 index settled the day in green, while 55 settled the day in red.
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After two days of battering, stocks staged a strong rebound, with the BSE Sensex surging 834 points to log its best daily gain in four months and the NSE Nifty revisiting 14,500 in style. We caught up with Ajit Mishra of Religare Broking to know his views on the market.