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

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Nifty formed a Doji on both daily and weekly scales.
NEW DELHI: After trading on a volatile note in Friday’s session, headline index Nifty formed indecisive candles similar to ‘Doji’ formations for both Friday’s session and for the week gone-by.

Rohit Singre of LKP Securities said Nifty50 has created a good base near the 14,250-14,200 range. “As long as these levels hold up, the structure will remain positive. A stiff hurdle lies in the 14,450-14,500 zone. The index may find fresh strength only above the 14,500 level,” he added.

“In the short term, there is little to protect the market from falling further. The medium and long-term story remains very compelling,” said Mark Matthews, Head Research Asia, Julius Baer.

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

Wall Street rallies on strong economic data
U.S. stocks rallied on Friday, driving the S&P 500 to a near-record closing high, after factory data and new home sales underscored a booming economy while megacap stocks rose in anticipation of strong earnings reports next week. The Dow Jones Industrial Average rose 0.67% and the S&P 500 gained 1.09%. The Nasdaq Composite added 1.44%.

European stocks log first weekly drop in eight
European stocks marked their first weekly loss in eight on Friday as a surge in global coronavirus cases offset optimism about a strong earnings season, while Madrid-based Allfunds jumped on its Amsterdam market debut. The pan-European STOXX 600 slipped 0.13%, while UK’s blue-chip FTSE 100 ended flat and Germany’s DAX slipped 0.4%.

Tech View: Nifty forms back-to-back indecisive candles on weekly scale
The index formed a Doji on both daily and weekly scales. It has been forming indecisive candles over the past three occasions on the weekly timeframe charts, with a lower high-low formation, which reflected weakness. Mazhar Mohammad of said the 14,300 level is acting as a glue for the bulls on a closing basis, as all intraday dips below 14,300 level are getting bought into by the bulls.

Check out the candlestick formations in the latest trading sessions

F&O: Bulls, bears in tug of war
India VIX fell 1.43% from 23.02 to 22.69 level. India VIX needs to hold below 20 level to again attract a bullish stance in the market. On the options front, maximum Put Open Interest stood at 14,000 level followed by 13,500, while maximum Call OI was seen at 15,000 followed by 14,500 levels. There was Call writing at strike prices 15,000 and 14,800 while Put writing was seen at 14,000 and 14,200 levels. Options data suggested a wider trading range between 14,000 and 14,700 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Alok Industries, Motherson Sumi Systems, Reliance Industries, PVR, Aditya Birla Fashion, Maruti Suzuki India, Whirlpool of India, Eveready Industries, Schneider Electric, United Breweries, Minda Industries, Aegis Logistics and Kaya.

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 Hindalco Industries, Bank of Maharashtra, Tata Consumer Products, HEG, Aarti Drugs, CSB Bank, NCL Industries, Emami, Sonata Software, Page Industries, Lux Industries, Sagar Cements and Agro Tech Foods. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Friday’s most active stocks
Tata Steel (Rs 2,303.78 crore), ICICI Bank (Rs 1,933.15 crore), Tata Motors (Rs 1,715.85 crore), HDFC Bank (Rs 1,610.78 crore), Cadila Healthcare (Rs 1,526.84 crore), SBI (Rs 1,487.96 crore), Adani Ports & SEZ (Rs 1,352.39 crore), Axis Bank (Rs 1,283.34 crore), Bajaj Finance (Rs 1,279.54 crore) and Dr. Reddy’s (Rs 1,205.90 crore) were among the most active stocks on Dalal Street on Friday in value terms.

Friday’s most active stocks in volume terms
PNB (Shares traded: 12.22 crore), YES Bank (Shares traded: 8.95 crore), SAIL (Shares traded: 7.28 crore), Vodafone Idea (Shares traded: 6.16 crore), Tata Motors (Shares traded: 5.82 crore), TV18 Broadcast (Shares traded: 5.62 crore), Bank of Baroda (Shares traded: 4.56 crore), SBI (Shares traded: 4.42 crore), IDFC First Bank (Shares traded: 4.31 crore) and BHEL (Shares traded: 4.23 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Tata Elxsi, Amrutanjan Healthcare, JSW Steel, Greenlam Industries, Suven Life Sciences, Vinati Organics and Jindal Steel & Power witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday, signalling bullish sentiment.

Stocks seeing selling pressure
The Investment Trust Of India, AKG Exim, Archies Ltd, Jump Networks, Suvidhaa Infoserve, Mittal Lifestyle and LCC Infotech witnessed strong selling pressure in Friday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter remained neutral
Overall, market breadth remained neutral. As many as 259 stocks on the BSE 500 index settled the day in green, while 236 settled the day in red.

Podcast: Can a depreciating rupee help you make money in a volatile market?>>>

Amid a continuous rise in Covid cases and localised lockdowns, Sensex has weakened by over 4 per cent so far this month to trade flat for the year to date. FIIs have turned net sellers on Dalal Street in April after a gap of six months. The rupee, on the other hand, dropped 66 paise during the week to end at 75.01 against the US dollar. In today’s special podcast with independent market expert Rajiv Nagpal, we throw the spotlight on the rupee to try and simplify its complex relationship with the dollar, FII flows and the stock market.

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1 Comment on this Story

Md Miquail33 minutes ago

Be ready to fight back. Stick to previous(Friday) bought stock. Ready to regain what you gained or lose.


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

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