Markets

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

NEW DELHI: Nifty ended lower for the second straight session on Wednesday but formed a small bullish candle on the daily chart.

Mazhar Mohammad of Chartviewindia.in said some sort of stability could emerge in the next session, as suggested by positions ahead of the weekly expiry, which can pave the way for short coverings in the next session.

“A sustaining above 11,300 can push the index towards the zone of 11,350 – 380 levels. It looks prudent on the part of short term traders to remain on sidelines. Intraday traders can consider shorting below 11,250 levels for a modest target of 11,190,” he said.

Vinod Nair of Geojit Financial Services said Indian markets are expected to be in sync with the global markets and also react to the ongoing border tensions with China as there are currently no fresh triggers for the market and volatility can be expected to continue.

Rajesh Palviya of Axis Securities said for any upside, 11,300 is a crucial hurdle to watch for.

“Any sustainable move above this will add strength towards 11,350-11,400 levels. On the downside, 11,200 is the immediate support zone,” he said.

That said here’s a look at what some of the key indicators are suggesting for Thursday’s action:
US stocks rebound as tech stocks stabilize after rout

US stocks bounced on Wednesday with the Nasdaq gaining 1.5%, as a rout in technology shares halted and investors shrugged off news that AstraZeneca had paused global trials of its experimental coronavirus vaccine. The Dow Jones Industrial Average was up 410.39 points, or 1.49%, at 27,911.28, the S&P 500 was up 56.44 points, or 1.69%, at 3,388.28, and the Nasdaq Composite was up 213.66 points, or 1.97%, at 11,061.35.

European shares bounce back after steep declines
European shares bounced back a bit on Wednesday after steep declines in the previous session, although sentiment remained fragile after AstraZeneca suspended global trials of its COVID-19 vaccine. The pan-European STOXX 600 index rose 0.8%, with sub-indexes of sectors hit most by the pandemic lagging. Travel and leisure stocks fell 1.5%, while autos dropped 0.6%.

Tech View: 11,300 level key now for Nifty
Nifty50 tested its crucial support at 11,250 level on Wednesday and even breached the psychological mark of 11,200 before staging a recovery. The index closed above the said support and ended up forming a small bullish candle on the daily chart. Analysts said while the bias remains negative, Thursday’s being the weekly expiry day, Nifty may see a short-covering bounce. Support for the index stays in the 11,250-11,155 range, they said, adding that any upside for Nifty50 from here on would be contingent upon a sustained move above the 11,300 level.

Check out the candlestick formations in the latest trading sessions

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F&O: Spike in VIX suggests volatile swings could return
India VIX fell 0.74 per cent to 22.55 mark. A spike in VIX from lower levels indicates short-term volatile swings could return to the market along with a roller-coaster ride. Options data suggested an immediate trading range between 11,100 and 11,500 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Wednesday showed bullish trade setup on the counters of Wipro, Escorts, Tejas Networks, Tanla Solutions, OnMobile Global, Amber Enterprises, Fine Organic Industries, PG Electroplast, Oriental Trimex, Mahamaya Steel Industries, Sandhar Technologies, Hisar Metal Industries and MRF.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Tata Motors, HDFC Bank, City Union Bank, Titan Company, JSW Energy, Jamna Auto Industries, Welspun India, Max Financial Services, Bata India, Godrej Properties, Inox Wind, Supreme Industries, Pitti Engineering, Aditya Birla Money, Compuage Infocom, Som Distilleries, Venky’s (India), TV Today Network, Whirlpool of India, Orient Bell, CreditAccess Grameen, Affle (India), Prataap Snacks, Kirloskar Oil Engine, Surana Solar, Gateway Distriparks, Kothari Sugar, Shanthi Gears and Sandesh among others.

Wednesday’s most active stocks
RIL (Rs 5453.53 crore), Bharti Airtel (Rs 1573.97 crore), Bajaj Finance (Rs 1563.59 crore), Tata Motors (Rs 1459.90 crore), SBI (Rs 1422.55 crore), Axis Bank (Rs 1365.80 crore), Tata Steel (Rs 1297.15 crore), ZEEL (Rs 1139.94 crore), Escorts (Rs 1056.65 crore) and IndusInd Bank (Rs 1028.44 crore) were among the most active stocks on Dalal Street on Wednesday in value terms.

Wednesday’s most active stocks in volume terms
Vodafone Idea (shares traded: 38.84 crore), YES Bank (shares traded: 14.21 crore), Tata Motors (shares traded: 10.53 crore), SBI (shares traded: 7.27 crore), Dish TV India (shares traded: 5.60 crore), ZEEL (shares traded: 5.28 crore), IDFC First Bank (shares traded: 4.24 crore), Federal Bank (shares traded: 3.77 crore), Tata Power (shares traded: 3.63 crore) and BHEL (shares traded: 3.60 crore) were among the most traded stocks in the session.

Stocks seeing buying interest
Adani Green Energy, Tata Elxsi, Infibeam Avenues, Hathway Cable and Ruchi Soya Industries witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Wednesday signalling bullish sentiment.

Stocks seeing selling pressure
Kuantum Papers, Max India, Silly Monks Entertainment and Sumit Woods witnessed strong selling pressure in Wednesday’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 149 stocks on the BSE 500 index settled the day in green, while 350 settled the day in red.

Podcast: What are the tech chart signals for Nifty? >>>

The selloff in the US tech stocks and a setback to one of the vaccine trials kept Dalal Street market participants on edge on Wednesday. As a result, BSE benchmark Sensex settled 171 points down at 38,194 and NSE Nifty closed 39 points lower at 11,278. We caught up with G Chokkalingam, Founder, Equinomics Research and Advisory, to try and understand the market undercurrent.

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