stock market analysis: Ahead of Market: 10 things that will decide stock action on Monday
Here’s how analysts read the market pulse:
“Nifty continued its downside momentum for the third consecutive session on Friday and closed the day lower by 132 points. After opening with a positive note, Nifty made an attempt of upmove soon after the opening. It failed to sustain the opening gains and slipped into weakness in the mid to later part of the session. Intraday upside recovery attempt in between has been used as a sell on rise opportunity,” Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said.
“Bears continue to have the upper hand as the benchmark index Nifty has been posting red candles for the last three days. The Nifty found support around the previous swing low on the daily timeframe. The momentum indicator RSI (14) is in bearish crossover, suggesting weak price momentum for the near term. Going forward, 17,770 is likely to act as support for the falling Nifty; a decisive fall below the said level may take the index towards 17,500. On the higher end, resistance is visible at 18,000, above which a recovery may come,” Rupak De, Senior Technical Analyst at
, said.
That said, here’s a look at what some key indicators are suggesting for Monday’s action:
US market sparks off global rally
Wall Street sparked a global rally in stocks on Friday after a crucial US jobs report showed wage growth slowed in December, fuelling investor bets that inflation is easing and that the Federal Reserve need not be as aggressive as some feared. Even though the data showed a still-robust labor market, investors read it as a sign that the U.S. economy might be poised for a “soft landing” amid rising rates. On Wall Street, the S&P 500 jumped 2.3%, the Dow Jones Industrial Average climbed 2.1% and the Nasdaq Composite surged 2.6%.
European shares close at 7-month high
European shares closed at seven-month highs on Friday, boosted by miners and oil stocks, while data pointing to a moderation in U.S. jobs growth helped calm nerves over the Federal Reserve’s rate-hike trajectory. The pan-European Stoxx 600 index closed 1.1% higher provisionally, marking a 3.4% rise for the week — its best performance since mid-November. Britain’s FTSE 100 index hit a more than three-year high on Friday, boosted by miners and energy stocks.
Tech View: Negative candle
A long negative candle was formed on the daily chart, which indicates a downside continuation pattern. Nifty has reached the support of previous swing lows of around 17780 levels and closed near the lows. The lack of meaningful upside recovery from the support indicates more weakness ahead.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed
, ITC, RVNL and among others.
The MACD is known for signaling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.
Stocks signaling weakness ahead
The MACD showed bearish signs on the counters of SBI,
, and NBCC (India).
Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
(Rs 1764 crore), (Rs 1285 crore), (Rs 939 crore) and TCS (Rs 806 crore) were among the most active stocks on NSE in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.
Most active stocks in volume terms
(Shares traded: 22.13 crore), (Shares traded: 11.41 crore), and IDBI Bank (Shares traded: 10.07 crore) were among the most traded stocks in the session on NSE.
Stocks showing buying interest
Shares of
, PFC, REC and RBL Bank hit their 52-week highs, which signals bullish sentiment on the counter.
Stocks seeing selling pressure
Shares of
, and among others hit their 52-week lows, which signals bearish sentiment on the counter.
