Nifty formed a bearish candle on the daily chart on Friday. The benchmark index is facing resistance above the psychological mark of 13,000, which has been the case for the past couple of sessions now. The Indian markets remained shut on Monday on account of Gurunanak Jayanti.
The headline index formed an indecisive Doji formation on the weekly chart, suggesting a blurred direction of the weekly trend.
Normally, a formation of Doji after a reasonable up move could be an alert of a possible trend-reversal, which can be confirmed with weakness in the subsequent weeks, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
Aditya Agarwala, Senior Technical Analyst, YES Securities said, “A sustained trade above 13,000 will resume the uptrend taking it higher to levels of 13,075-13,130. However, on the flip side, a move below 12,800 could trigger profit booking, dragging the index lower to levels of 12,700. Technical indicator RSI has also turned down after forming a negative divergence suggesting that a temporary pause in the uptrend may be on the cards,” he added.
“Today’s market momentum was driven by uncertainty related to efficacy of Covid vaccine and expectation of Q2 GDP data. Although GDP is expected to improve compared to the previous quarter, the recovery in Indian economy is likely to be lower in comparison to its global peers. Recently, broader markets are outperforming the main benchmark showing a shift in demand to mid & small caps,” said Vinod Nair, Head of Research at Geojit Financial Services.
That said, here’s a look at what some of the key indicators are suggesting for Tuesday’s action:
US markets fall ahead of crucial economic data
The S&P 500 fell on Monday as investors paused ahead of crucial economic indicators later this week to take stock of what was set to be the benchmark index’s best November ever. The Dow Jones Industrial Average fell 253.86 points, or 0.85% to 29,656.83. The S&P 500 was down by 10.17 points, or 0.28%, at 3,628.30, while the Nasdaq Composite gained 12.40 points, or 0.10%, to 12,218.02.
European shares muted at end of stellar month
Europe’s benchmark stock index was flat on Monday with focus on Brexit negotiations, but was still on track for its best month on record on the prospect of easing coronavirus restrictions and hopes for a COVID-19 vaccine. While upbeat factory activity data from China kept alive hopes of a global economic recovery, it did little to buoy the pan-European STOXX 600 index after its near 15% surge so far in November.
Tech view: Nifty50 forms Doji on weekly chart
Nifty50 on Friday formed a bearish candle on the daily chart and an indecisive Doji on the weekly chart. Analysts largely see 12,750-13,150 as the range for the index for the coming week. A break above this range can offer directional cues, they said. Normally, a formation of Doji after a reasonable up move could be an alert of a possible trend-reversal, which can be confirmed with weakness in the subsequent weeks, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities. The Doji pattern, he said, was formed just above the crucial long-term resistance of the ascending trend line — uptrend line connected from top to top-weekly/monthly chart. It signalled chances of downward correction below the trend line support of 12,800 levels, Shetti said.
Check out the candlestick formations in the latest trading sessions
F&O: Lower volatility suggests bulls holding ground
India VIX slipped 1.01% from 20.2 to 19.8 level. Lower volatility suggests the bulls are holding a grip and every decline triggered buying in the market. On the option front, maximum Put open interest stood at 12,000 level followed by 13,000, while maximum Call OI was at 13,000 followed by 13,500 levels. Options data suggested a wider trading range between 12,500 and 13,500 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Coal India, Cadila Healthcare, TVS Motor, Dish TV India, Sun TV Network, Voltas, Indian Hotels, Welspun India, Inox Leisure, JSW Ispat Special, Khadim India, Bliss GVS Pharma, Shalimar Paints, JK Cement, J B Chemicals & Pharmaceuticals, Gujarat Sidhee Cement, ICICI Securities, Tera Software, BLS International Services, Finolex Industries, Jindal Worldwide, Dr. Lal Pathlabs, Cantabil Retail India, Ansal Properties & Infrastructure, EPL Ltd, TeamLease Service, L&T Technology Services, InfoBeans Tech, Nilkamal, Chembond Chemicals, Expleo Solutions, Dhunseri Ventures, Agro Tech Foods, Esab India, Vadilal Industries and Lakshmi Finance.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Indian Oil Corporation, Hindustan Unilever, Network 18 Media, IIFL Finance, Sonata Software, Nippon Life AMC, Rites Ltd, JK Lakshmi Cement, Sobha, Repco Home Finance, Dilip Buildcon, Shreyas Shipping, CESC Ventures, Dynemic Products, Lakshmi Machines, VST Tillers Tractors, Premier Explosives, Savita Oil Tech, Hester Biosciences and Dhunseri Investments.
Friday’s most active stocks
Kotak Bank (Rs 14982.21 crore), Bajaj Finance (Rs 6047.86 crore), Adani Green (Rs 5149.73 crore), RIL (Rs 4228.15 crore), Infosys (Rs 2793.42 crore), Tata Steel (Rs 2664.39 crore), ICICI Bank (Rs 2297.73 crore), Tata Motors (Rs 2280.75 crore), HDFC (Rs 2280.15 crore) and Asian Paints (Rs 2216.65 crore) were among the most active stocks on Dalal Street on Friday in value terms.
Friday’s most active stocks in volume terms
YES Bank (Shares traded: 109.52 crore), NTPC (Shares traded: 21.70 crore), Vodafone Idea (Shares traded: 21.12 crore), Tata Motors (Shares traded: 12.59 crore), BHEL (Shares traded: 10.17 crore), L&T Finance Holding (Shares traded: 8.27 crore), Kotak Mahindra Bank (Shares traded: 7.87 crore), SAIL (Shares traded: 7.66 crore), PNB (Shares traded: 7.20 crore) and Federal Bank (Shares traded: 7.16 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Varun Beverages, Alkyl Amines, P&> Health, ABB Power Products and Cholamandalam Investment and Finance witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday signalling bullish sentiment.
Stocks seeing selling pressure
Standard Industries, Sintercom India, Vishal Fabrics, Keerti Knowledge and Skills, Jump Networks, Shoppers Stop, D. P. Abhushan Ltd witnessed strong selling pressure in Friday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favoured the bulls
Overall, market breadth remained in favour of bulls. As many as 350 stocks on the BSE 500 index settled the day in green, while 143 settled the day in red.