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

NEW DELHI: As Nifty ended below the 11,350 level on Friday, it formed a bearish candle on the daily chart.

Chandan Taparia of Motilal Oswal Financial Services said the index is facing multiple hurdles in the 11,450-11,550 zone and as long as it remains below the same, weakness could be seen towards 11,200 and then 11,111 levels.

Vinod Nair of Geojit Financial Services said uncertainties await the market next week, be it from global economic data points or geopolitical uncertainties related to Indo-China border tensions.

“Indian market has been moving in sync with its global counterparts and will have an impact. Markets seem to have lost momentum for the near term and could be heading into a round of consolidation. Investors should stay alert,” he said.

Mazhar Mohammad of said a close below the 20-day EMA is clearly confirming that the trend might have decisively reversed in favour of the bears.

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

Rout in US tech stocks continues
The Nasdaq closed lower on Friday though well above its session low as selling eased late in the day after investors dumped heavyweight technology stocks due to concerns about high valuations and a patchy economic recovery. The Dow ended the session 159 points, or 0.56%, lower at 28,133, while the S&P500 lost 28.1 points, or 0.81%, to 3,426.

European shares see selloff
European stocks closed lower on Friday as a sell-off in the tech sector continued for a second consecutive trading session. European stocks closed lower on Friday as a sell-off in the tech sector continued for a second consecutive trading session. FTSE lost 0.88 per cent, DAX 1.65 per cent and CAC40 0.89 per cent.

Tech View: Nifty forms indecisive candle
Nifty50 on Friday formed an indecisive candle on the daily scale with long upper wick, and a ‘Bearish Engulfing’ candle on the weekly scale. The index slipped below its 20-day exponential moving average (EMA), signalling further loss of momentum. Analysts said the index needs to stay above the 11,300 level to avoid a steep fall next week.

F&O: VIX spurts 8% to 22.15
India VIX moved up 8.06 per cent at 22.15 level. A spike in VIX after the dip of last three sessions indicates that short-term volatile swings can return over the next few sessions. Options data suggested a broader trading range between 11,100 and 11,600 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Granules India, Jain Irrigation, Tata Consultancy Services, Century Textiles, Aditya Birla Money, Astec Lifesciences, Nestle India, VST Tillers, Vertoz Advertising, Lakshmi Machines, Gujarat Apollo Industries, Shiva Texyarn and Indo Thai Securities.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of BHEL, ICICI Bank, RBL Bank, GMR Infrastructure, DLF, Canara Bank, Adani Ports, Indian Hotels, Cholamandalam Investment, Bajaj Finance , HDFC, Future Enterprises, Himadri Speciality, Karur Vysya Bank, Karnataka Bank, Aksh Optifibre, Sanghi Industries, Raymond, Adani Transmission and NIIT, among others.

Friday’s most active stocks
RIL (Rs 2739.14 crore) , Vodafone Idea (Rs 2018.07 crore) , Bajaj Finance (Rs 1769.38 crore) , Maruti Suzuki (Rs 1577.89 crore) , Bharti Infratel (Rs 1532.40 crore) , Bharti Airtel (Rs 1485.67 crore) , Tata Motors (Rs 1436.50 crore) , Axis Bank (Rs 1358.97 crore) , IndusInd Bank (Rs 1349.43 crore) and HDFC Bank (Rs 1318.47 crore) were among the most active stocks on Dalal Street on Friday in value terms.

Friday’s most active stocks in volume terms
Vodafone Idea (shares traded: 163.01 crore) , Tata Motors (shares traded: 9.55 crore) , YES Bank (shares traded: 8.56 crore) , Bharti Infratel (shares traded: 6.91 crore) , Ashok Leyland (shares traded: 6.89 crore) , SBI (shares traded: 5.44 crore) , BHEL (shares traded: 5.09 crore) , IDFC First Bank (shares traded: 5.06 crore) , ZEEL (shares traded: 4.89 crore) and ITC (shares traded: 4.13 crore) were among the most traded stocks in the session.

Stocks seeing buying interest
Granules India, AstraZeneca, Amber Enterprises India, Timken India and Adani Gas witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday signalling bullish sentiment.

Stocks seeing selling pressure
Rajesh Exports, Max India and Kuantum Papers 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, market breadth remained in favour of bears. As many as 85 stocks on the BSE 500 index settled the day in green, while 415 settled the day in red.

Podcast: Is the market downturn going to prolong?>>>
After the market saw a major downturn last week, some analysts said it was probably the beginning of the much-awaited correction. Is this correction going to prolong? What should be your market strategy now. Listen in!

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