As Nifty ended higher for the second consecutive session on Tuesday, it formed a bullish candle on the daily chart.
Ajit Mishra of Religare Broking said, it’s surprising the way the benchmark is showing resilience amid mixed cues.
“Going ahead, upcoming data viz. core sector and auto sales along with global cues will remain on the participants’ radar. Needless to say, the recent deterioration of the Covid situation in India has dented sentiment and will be closely watched by the participants in the coming sessions too. We, thus, reiterate our cautious stance until we see some decisiveness in the trend,” he said.
“Bank Nifty can go up to 34,500/34,700. If the Bank Nifty performs, the Nifty could move closer to 14,900 and 15,050 levels,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
US shares drop as tech stocks hit by spike in yields
Wall Street’s main indexes slipped on Tuesday as investors pulled out of heavyweight tech-related stocks and flocked to undervalued banks and industrial stocks amid a rise in US bond yields. The Dow Jones Industrial Average fell 111.33 points, or 0.34% , to 33,060.04, the S&P 500 lost 20.71 points, or 0.53%, to 3,949.97 and the Nasdaq Composite lost 107.32 points, or 0.82%, to 12,952.33.
European shares inch towards record high
European shares headed towards record highs on Tuesday on hopes of a vaccine-driven economic recovery, while investors looked past the fallout of a U.S. hedge fund default that hit banking stocks a day earlier. The pan-European STOXX 600 index gained 0.78%, trading less than a percent below its pre-pandemic peak.
Tech View Nifty may continue to consolidate
Nifty50 climbed for the second straight session on Tuesday and formed a long bullish candle on the daily chart, and that happened after a gap up start. In the process, the index closed above the 20-day and 50-day simple moving averages. Analysts said the index has almost retraced the last leg of losses from the highs of 14,878 to 14,264 levels in last two sessions. But they believe the index may continue to consolidate going forward. Mazhar Mohammad of Chartviewindia.in said the bulls need to defend Tuesday’s bullish gap zone present in the 14,617-14,572 zone, and the ongoing bullish optimism may fade away below this level.
F&O VIX needs to cool down below 20 level
India VIX fell 0.80% from 22.65 to 20.48 levels. The index needs to cool down below 20 level for the bullish grip to continue and ensure that the market move remains smooth. On the options front, maximum Put open interest stood at 14,000 level followed by 14,500, while maximum Call OI was seen at 15,000 followed by 16,000 levels. There was Call writing at strike prices 14,800 and 15,200 while Put writing was seen at 14,000 and then 14,500 levels. Options data suggested an immediate trading range between 14,500 level and the 15,000-15,200 zone.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of SAIL, Tata Steel, HCL Technologies, HDFC, Praj Industries, Cadila Healthcare, Laurus Labs, Vakrangee, Strides Pharma Science, Kothari Sugar, Mphasis, Emami, Coforge, Mukand, Sumitomo Chemical, Refex Industries, WABCO India, JSW Ispat Special, Sequent Scientific, Oracle Financial Services, IFB Industries, Lux Industries, L&T Infotech, Alkali Metals, Coromandel International, Ipca Laboratories, Sreeleathers, APL Apollo Tubes, Mahamaya Steel
Industries, and Alkem Laboratories amon others.
Stock signalling weakness ahead
The MACD showed bearish signs on the counters of Bandhan Bank, Reliance Infrastructure, Sterling and Wilson, Adani Green Energy, KCP, Ester India, Allied Digital Services, J Kumar Infraproject, Nahar Poly Films, Steel City Securities, Ahluwalia Contracts, Rajratan Global Wire and GB Global among others.
Thuesday’s most active stoacks
Tata Steel (Rs 2271.44 crore), HDFC Bank (Rs 1968.47 crore), RIL (Rs 1910.82 crore), Axis Bank (Rs 1817.40 crore), ICICI Bank (Rs 1647.99 crore), TCS (Rs 1472.62 crore), Infosys (Rs 1447.71 crore), SBI (Rs 1420.45 crore), Tata Motors (Rs 1342.30 crore) and Nazara Technologies (Rs 1323.45 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.
Tuesday’s most active stocks in volume terms
YES Bank (shares traded: 33.25 crore), Vodafone Idea (shares traded: 17.01 crore), PNB (shares traded: 9.48 crore), SAIL (shares traded: 9.06 crore), Bank of Baroda (shares traded: 8.38 crore), GAIL (shares traded: 7.18 crore), Tata Power (shares traded: 4.74 crore), Tata Motors (shares traded: 4.53 crore), BHEL (shares traded: 4.16 crore) and SBI (shares traded: 3.94 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Au Small Fin Bank, Oracle, Mphasis, Mindtree and APL Apollo Tube witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.
Stocks seeing selling pressure
Atlas Cycles, Future Lifestyle Fashions, Global Education and Jubilant Ingrevia 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 336 stocks on the BSE 500 index settled the day in green, while 159 settled the day in red.
Podcast: Are year-end MF adjustments behind market rally?
Benchmark indices outshone global peers, rallying over 2 per cent on Tuesday, after an extended holiday. The gains, some analysts said, had to do with mutual fund adjustments ahead of the financial year-end. Cues from global markets were also positive as investors globally shrugged off $20 billion liquidation by a hedge fund in the US, thanks to recovery in US stocks overnight. Sensex soared 1,128 points to close near 50,150. Nifty jumped 2.3 per cent and closed near 14,850. We spoke to Narendra Solanki of Anand Rathi Financial Services to share his views on the market.