Finace And Stock

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

MUMBAI: Nifty50 on Wednesday formed a Bearish Engulfing Pattern on the daily chart, as the benchmark index closed lower. Analysts said the chart formation suggests weakness is likely to sustain going ahead.

Here’s how analysts read the market pulse:

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas said short term consolidation is expected to continue further. Structurally, the index can take the form of a triangular pattern, which would also mean consolidation in the next few sessions.

Mazhar Mohammad of Chartviewindia.in said the possibility of Nifty retesting recent lows remains high provided it consistently trades below 17,600 levels in the next one or two trading sessions. “We advise traders to avoid buying dip in haste whereas, positional traders with high risk appetite can go short in the zone of 17,700-750 levels by placing a stop loss above 17,885 and look for a target of 17,500,” he said.

That said, here’s a look at what some of the key indicators are suggesting for Thursday’s action:


Wall Street slips on taper fears


U.S. stock indexes fell on Wednesday after a strong showing of private jobs in September fueled concerns of a sooner-than-expected tightening of monetary stimulus in the face of growing worries of higher inflation. At 9:55 a.m. ET, the Dow Jones Industrial Average was down 316.84 points, or 0.92 per cent, at 33,997.83, the S&P 500 was down 38.30 points, or 0.88 per cent, at 4,307.42 and the Nasdaq Composite was down 105.65 points, or 0.73 per cent, at 14,328.19.


European shares fall on fear of high inflation


London’s blue-chip stocks fell on Wednesday, pressured by fears of higher inflation, while supermarket retailer Tesco topped the index on raising its annual outlook and strong first-half results. The FTSE 100 index eased 1.2 per cent, recording its worst session since August, weighed by energy and mining stocks, both down 2.6 per cent and 1.7 per cent respectively. Broader STOXX Europe 600 fell 1.05 per cent to 451.22.


Tech View: Avoid long positions


The weakness in the benchmark indices today provided further evidence to technical analysts that the current consolidation in the market could continue. Analysts said that going ahead the immediate support zone for the Nifty50 index is near 17,500-17,600 points. If those levels hold up, then the index can see a swift pullback.



F&O: Spike in VIX worrisome


A spurt in volatility after the decline of last four sessions has again triggered volatile swings in the broader market. Now the India VIX index needs to cool down below the 15-14 points zone to continue the smooth ride of the market.


Stocks showing bullish bias


Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Jain Irrigation, Tata Coffee, HDFC Bank, UPL, Gujarat Gas and Sanghi Industries.

The MACD is known for signalling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.


Stocks signalling weakness ahead


The MACD showed bearish signs on the counters of Vodafone Idea, IDFC First Bank, Hinddalco Industries, Karur Vysya Bank, M&M Financial, IndusInd Bank, Religare Enteprises, Grasim Industries, Presitge Estates, Sunteck Realty, Gravita India, and ICICI Securities. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.


Most active stocks in value terms


IRCTC (Rs 5153 crore), Tata Power (Rs 1792 crore), ONGC (Rs 1713 crore), HDFC Bank (Rs 1501 crore), Deepak Nitrite (Rs 1413 crore), Bajaj Finance (Rs 1373 crore), RIL (Rs 1224 crore), Tata Steel (Rs 1121 crore), Bosch (Rs 1089 crore) and HDFC (Rs 989 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.


Most active stocks in volume terms


Vodafone Idea (Shares traded: 46 crore), Suzlon Energy (Shares traded: 16 crore), YES Bank (Shares traded: 12 crore), Tata Power (Shares traded: 10 crore), ONGC (Shares traded: 10 crore), PNB (Shares traded: 8 crore), SAIL (Shares traded: 5 crore), BHEL (Shares traded: 4.8 crore), Coal India (Shares traded: 4 crore) and IRCTC (Shares traded: 4 crore) were among the most traded stocks in the session.


Stocks seeing buying interest


Bosch, Deepak Nitrite, IRCTC, Tata Elxsi and Nazara Technologies witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.


Stocks seeing selling pressure


Quadpro ITeS, Inventure Growth and Krsnaa Diagnostics witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on these counters.


Sentiment meter favours bears


Overall, the market breadth remained in favour of the bears. As many as 125 stocks on the BSE500 index settled the day in the green, while 375 settled the day in the red.


Podcast: What led to the late selloff today?


BSE Sensex gyrated in the range of about 900 points, before settling 10-odd points below 59,200, about 555 points lower than previous close. Nifty50, which was trading in the range of 240 points, gave up more than 175 points to end the day below 17,650. BSE midcap and smallcap also ended the day with cuts. What led to the sharp selloff in the markets in the afternoon session? How should investors protect wealth and benefit from this volatile market?


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