Markets

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

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

Chandan Taparia, Motilal Oswal Financial Services said the index is facing hurdles near to 11450 zones and till it remains below the same, weakness could be seen towards 11250 and then 11200 levels.

“On the upside, resistances are placed at 11450 and then 11500 zones to again get the bullish grip in the market, he said.

Ajit Mishra of Religare Broking said the recent dip is in line with profit-taking in the global markets however further escalation of border tension between India and China may deteriorate the sentiment further.

“Traders should focus more on risk management in the current scenario and prefer hedged trades,” he said.

Mazhar Mohammad of Chartviewindia.in said the index saw a new low on a closing price chart in this corrective swing, which is in progress from the highs of 11,794 level.

“This correction shall get accelerated further going forward if the index falls below 11,250 level, towards an initial target of 11,100,” he said.

That said here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
US shares tumble as investors dump tech stocks
The Nasdaq tumbled on Tuesday as investors dumped high-flying technology stocks, while Tesla tracked its worst day in nearly six months after a surprise exclusion from the S&P 500. The Dow Jones Industrial Average was down 536.63 points, or 1.91%, at 27,596.68, the S&P 500 was down 70.76 points, or 2.06%, at 3,356.20, and the Nasdaq Composite was down 286.42 points, or 2.53%, at 11,026.72.

Brexit tensions weigh on European shares
European shares fell on Tuesday on fears that the UK was in danger of leaving the European Union without a trade agreement, while technology firms tumbled as their US peers looked set to deepen a selloff from last week. The pan-European STOXX 600 fell 0.4%, shortly after opening marginally higher, as technology stocks weighed the most with a 1.7% fall.

Tech View: Nifty forms bearish candle
Nifty50 on Tuesday failed to capitalise on the intraday gains, as it faced selling pressure near the 11,450 level. The index tested the 11,300 level at the fag-end, before closing the session at 11,317. It formed a small bearish candle on the daily chart. Nifty has been making small candles for a couple of sessions now, suggesting consolidation. A fall below the 11,250 level may attract selling, analysts said, who believe the 11,450 level may continue to be the immediate hurdle for Nifty. For now, the index is trading between the 20-day and 40-day moving averages, which are the key short-term targets.

Check out the candlestick formations in the latest trading sessions

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F&O: VIX spike indicates swings ahead
India VIX moved up 3.24 per cent to 22.72 level. A spike in VIX indicates short-term volatile swings, which could be back again with 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 Tuesday showed bullish trade setup on the counters of Panacea Biotec, Sadbhav Engineering, Vikas Proppant, Gayatri Projects, Poly Medicure, Cantabil Retail, Ravi Kumar Distiller, Johnson Controls-Hit, Hinduja Global Solutions, Digicontent, The Investment Trust and Shiva Texyarn.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Adani Enterprises, LIC Housing, Grasim Industries, Escorts, Sun TV Network, DCB Bank, Gujarat Narmada Valley, IIFL Finance, Techno Electric, V-Guard Industries, Sunteck Realty, ITD Cementation, Aegis Logistics, NCL Industries, Bombay Rayon Fashion, Alankit, HDFC AMC, Indian Terrain Fashions, Godrej Industries, Triveni Turbine, SAL Steel, Schneider Electric, Oricon Enterprises, Shivam Autotech, Shemaroo Entertainment, Tube Investments, Vardhman Acrylics, Aarvee Denims, Prime Securities, Muthoot Capital, Madhucon Project, STEL Holdings, Sirca Paints India, SKF India, Uniphos Enterprises, HOV Services, Madhav Marbles and India Motor Part among others.

Tuesday’s most active stocks
RIL (Rs 2664.92 crore), TCS (Rs 1763.40 crore), Bharti Airtel (Rs 1676.37 crore), Bajaj Finance (Rs 1569.50 crore), Infosys (Rs 1215.11 crore), ICICI Bank (Rs 1208.54 crore), Tata Motors (Rs 1110.76 crore), Axis Bank (Rs 954.36 crore), HCL Tech (Rs 838.48 crore) and Maruti Suzuki (Rs 827.15 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.

Tuesday’s most active stocks in volume terms
Vodafone Idea (shares traded: 50.41 crore), Tata Motors (shares traded: 7.63 crore), YES Bank (shares traded: 6.84 crore), SAIL (shares traded: 6.57 crore), Future Consumer (shares traded: 6.51 crore), SBI (shares traded: 3.41 crore), ZEEL (shares traded: 3.37 crore), Bharti Airtel (shares traded: 3.31 crore), ICICI Bank (shares traded: 3.20 crore) and NTPC (shares traded: 3.12 crore) were among the most traded stocks in the session.

Stocks seeing buying interest
Dixon Technologies (India), IndiaMART InterMESH, Tata Elxsi, HCL Tech and Amber Enterprises India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.

Stocks seeing selling pressure
Max India and Madhav Copper witnessed strong selling pressure in Tuesday’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 109 stocks on the BSE 500 index settled the day in green, while 388 settled the day in red.

Podcast: Are the bears back in action on D-Street? >>>

The bears on Dalal Street succeeded in putting enough pressure on the domestic equity indices to wipe out afternoon gains during the last half an hour of trade on Tuesday. Overall, the 30-share pack Sensex closed 52 points down at 38,365 while Nifty shed nearly 38 points to 11,317. Smallcaps and midcaps underperformed their largecaps. Telecom, metals, realty and capital goods indices declined up to 4 per cent, while IT, energy and Teck indices ended in the green. We caught up with Ajit Mishra of Religare Broking to try and understand the market undercurrent.

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