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


NEW DELHI: After profit booking went unabated for the fourth consecutive session on Friday, domestic headline equity index Nifty breached the crucial support level of 15,000 and formed a bearish candle for the day. On the weekly scale, the 50-pack index formed a ‘Bearish engulfing’ pattern as it retraced below the 15,000 mark after 10 sessions.

Chandan Taparia of Motilal Oswal Securities said as long as the index remains below 15,150 level, it would continue to see weakness and head towards its next key support at 14,800 and 14,700 levels. On the upside, he said, hurdles are seen at 15,250 and 15,400 levels.

“Profit taking was evident throughout the day as we witnessed several pivotals succumbing to selling pressure as traders feared rising Covid cases in Maharashtra. The PSU bank index which rose 12 per cent in the last two days shed 5 per cent today,” 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:

Wall Street closes flat as cyclicals shine, big tech falls
Stocks on Wall Street closed near break-even on Friday as investors sold technology shares that have rallied through the pandemic and rotated into cyclical stocks set to benefit from pent-up demand once the coronavirus pandemic is subdued. The Dow Jones Industrial Average edged up 0.98 points, or 0%, to 31,494.32 and the Nasdaq Composite added 9.11 points, or 0.07%, to 13,874.46. The S&P 500 dropped 7.26 points, or 0.19%, to 3,906.71.

European shares end higher on strong earnings, positive data
Euro zone shares rose on Friday, marking a third week of gains, as data showed factory activity in February jumped to a three-year high, while upbeat quarterly earnings boosted confidence in a broader economic recovery. The pan-European STOXX 600 index rose 0.5%, as regional factory activity was seen reaching a three-year high on strong demand for manufactured goods at home and overseas. London’s FTSE 100 lagged regional bourses on Friday due to a slump in January retail sales and as the pound jumped to its highest against the dollar in nearly three years.

Tech View: Tech indicators hint at trend reversal
Analysts believe Nifty could drift towards the 14,400-14,700 range in the coming days. “The short-term momentum indicator has turned in favour of the bears,” said Gaurav Ratnaparkhi of Sharekhan, who believes the index is poised for further decline. “The 14,400 level is the short-term target on the downside,” he said.

Check out the candlestick formations in the latest trading sessions


F&O: Nifty again forms lower highs & lows
India VIX rose 3.30% from 21.54 to 22.25 level. VIX needs to cool down and hold below 20 level to attract support-based buying and again make an attempt to go towards its lifetime high with a higher market base. On the options front, maximum Put Open Interest stood at 14,000 and then 15,000 levels, while maximum Call OI was seen at 16,000 followed by 15,500 levels. There was Put writing at 14,800 and 14,900 levels, while Call writing was seen at 15,200 and 15,000 levels. Options data suggested a wider trading range between 14,700 and 15,500 levels, while the immediate range was seen between 14,800 and 15,200 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Tata Motors, Schneider Electric, Marico, Minda Corporation, Camlin Fine Sciences, Filatex India, KRBL, Network 18 Media, Jain Irrigation, and others.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of ICICI Bank, Mahindra & Mahindra, JSW Steel, HDFC, SBI Cards, Jamna Auto, Hero MotoCorp, Escorts Ltd, Berger Paints, UltraTech Cement, Siemens, IIFL Finance, Fineotex Chemical, NRB Bearings, Oberoi Realty, and others.

Friday’s most active stocks
SBI (Rs 2,679.70 crore), Tata Motors (Rs 2,515.09 crore), RIL (Rs 2,255.33 crore), PNB (Rs 1,890.13 crore), Bank of Baroda (Rs 1,741.30 crore), IDFC First Bank (Rs 1,633.60 crore), Adani Enterprises (Rs 1,591.83 crore), IndusInd Bank (Rs 1,536.81 crore), Bajaj Finance (Rs 1,517.63 crore) and Tata Steel (Rs 1,512.52 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: 42.99 crore), Vodafone Idea (Shares traded: 31.62 crore), IDFC First Bank (Shares traded: 26.14 crore), Bank of Baroda (Shares traded: 18.42 crore), IOB (Shares traded: 16.09 crore), Central Bank of India (Shares traded: 13.80 crore), Bank of Maharashtra (Shares traded: 11.71 crore), YES Bank (Shares traded: 9.48 crore), Union Bank of India (Shares traded: 8.74 crore) and Tata Motors (Shares traded: 8.03 crore) were among the most traded stocks in the session.

Stocks showing buying interest
New India Assurance Company, IDFC First Bank, Tata Chemicals and IDFC 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, Global Education, Jiya Eco-Products, Radha Madhav Corporation, Ravinder Heights and Sanwaria Consumer witnessed strong selling pressure in Friday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bears
Overall, the market breadth remained in favour of bears. As many as 137 stocks on the BSE 500 index settled the day in green, while 358 settled the day in red.

Podcast: Is there more steam left in the PSU privatisation play? >>>

As Nifty bled in four out of last 5 sessions, one most visible trend was traders throwing their weight behind select PSU stocks. In fact, many of them laughed all the way to the bank, as Nifty PSU Bank index shot up some 11 per cent amid the halt to the broader market rally. Indian Overseas Bank led the pack with a spectacular rally of 59 per cent. Two govt-owned PSU stocks — New India Assurance Company (NIA) and General Insurance Corporation of India (GIC Re) — jumped 44 per cent and 37 per cent, respectively, for the week. Let’s spot money-making opportunities in the PSU pack in today’s special podcast with independent market expert Rajiv Nagpal.

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