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

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NEW DELHI: On the weekly chart, Nifty formed a ‘Long Legged Doji’ on Friday as the headline index closed near its opening level. Manish Hathiramani, technical analyst at Deen Dayal Investments, said it is crucial for this level to be taken out this week as that would signal an up move to 15,300-15,400. “If the support of 14,400 is broken, we will revisit the previous lows of 14,200 and can drift further to 13,900,” he said.

“Yet again, we witnessed a day when all the actions were in the broader market with pharmaceuticals doing well. Provisional data on direct tax collections for the last fiscal kept sentiments buoyant in select FMCG stocks,” said S Ranganathan, Head of Research at LKP Securities.

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


US stocks climb for third day
The S&P 500 and the Dow rose on Friday to close at record highs, posting a third straight weekly rise partly on a lift from growth stocks, with a late-day rally building gains ahead of quarterly earnings season next week. The Dow Jones Industrial Average rose 0.89 per cent, the S&P 500 gained 0.77% and the Nasdaq Composite added 0.51%.

European stocks mark longest weekly winning streak since Nov 2019
European stocks were subdued on Friday, but marked their longest weekly winning streak since November 2019 as hopes of a rapid recovery in economic growth offset doubts over the euro zone’s COVID-19 vaccination programme. The pan-European STOXX 600 index was up 0.1% after hitting an all-time high at the open, while the UK’s blue-chip FTSE 100 slipped 0.4%.

Tech View: Nifty’s Long-Legged Doji on weekly chart suggests indecisiveness
Aditya Agarwala of YES Securities said if the bulls manage to push Nifty beyond the 14,880-14,900 zone, the index can rise and test the 15,100-15,200 zone. “A failure to do so may extend this rangebound consolidation and drag Nifty lower to 14,600-14,450 levels with an intermediate support at 14,760 level, being the confluence of the 20-DMA & 50-DMA. Technical indicator RSI, too, is oscillating in the 55-45 range, confirming sideways consolidation at the moment,” Agarwala said.

Check out the candlestick formations in the latest trading sessions

candleETMarkets.com

F&O: Market seeing buying at lower levels, but Nifty50 is stuck in a range
India VIX fell 2.58% from 20.31 to 19.78 levels. Lower volatility and a hold below 20 level could help keep the market favourable for a buy-on-declines strategy. 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. Minor Call writing was seen at strike prices 15,000 and then 15,200 while there was minor Put writing at 14,800 level.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Punjab National Bank, Bank of Maharashtra, JSW Energy, Zee Entertainment, RBL Bank, Bajaj Consumer Care, Kotak Mahindra Bank, Voltas, Muthoot Finance, IRB Infrastructure, Avenue Supermarts, Maruti Suzuki India, PNB Housing Finance, KEI Industries, DCM Shriram, Gokaldas Exports, JK Cement, Kennametal India and Kirloskar Industries.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Deepak Nitrite, Intellect Design, HG Infra Engineering, South West Pinnacle, Poly Medicure, Grindwell Norton, Page Industries, TeamLease Service, Autoline Industries, CL Educate and Krishana Phoschem.

Friday’s most active stocks
JSW Steel (Rs 3,130.41 crore), Tata Steel (Rs 2,905.15 crore), Tata Motors (Rs 2,420.51 crore), HDFC Bank (Rs 2,003.26 crore), Adani Ports & SEZ (Rs 1,803.60 crore), SBI (Rs 1,660.44 crore), Adani Enterprises (Rs 1,546.60 crore), Bajaj Finance (Rs 1,424.87 crore), ICICI Bank (Rs 1,325.70 crore) and RIL (Rs 1,288.62 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: 13.03 crore), Vodafone Idea (Shares traded: 9.89 crore), IDFC First Bank (Shares traded: 7.80 crore), Tata Motors (Shares traded: 7.55 crore), SAIL (Shares traded: 7.02 crore), Bank of Baroda (Shares traded: 5.79 crore), IOB (Shares traded: 5.71 crore), Bank of Maharashtra (Shares traded: 5.53 crore), JSW Steel (Shares traded: 5.11 crore) and Subex (Shares traded: 4.78 crore) were among the most traded stocks in the session.

Stocks showing buying interest
TCS, Ambuja Cements, Dabur India, Emami, Infosys, L&T Technology Services, MindTree, NMDC, Persistent Systems, Persistent Systems, Sobha and UltraTech Cement witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday, signalling bullish sentiment.

Stocks seeing selling pressure
AKG Exim, KDDL Ltd, LCC Infotech, Ortin Laboratories and Suvidhaa Infoserve witnessed strong selling pressure in Friday’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 265 stocks on the BSE 500 index settled the day in green, while 230 settled the day in red.

Podcast: Will bank stocks be the biggest casualty of Covid 2.0? >>>
As investors lap up stocks from defensive sectors like IT, pharma and FMCG, besides metals, in a choppy market, financials seem to be losing their charm. Investors fear the second wave of Covid may worsen the outlook for banks. Bank Nifty lost 4 per cent in value terms last week and is down over 9 per cent on a monthly basis. Metals, on the other hand, continue to mint money for investors. In today’s special podcast with independent market expert Rajiv Nagpal, we dig deeper on the outlook for banking stocks amid Covid 2.0.

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