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


MUMBAI: Nifty50 today formed a bearish candle on the daily chart on Wednesday as the index closed lower for the 4th consecutive session.


Here’s how analysts read the market pulse:

Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan said that Nifty50 has seen continued selling pressure near its key hourly moving averages and the 20-day moving average. He said that the index saw follow-through selling on Wednesday after making a Popgun pattern on the daily chart.

Mazhar Mohammad of Chartviewindia.in said if the counter-trend rally has culminated at recent highs of 17,639, Nifty50 should either consolidate in a broader range of 17,600-17,000 levels or revisit its recent corrective swing low of 16782 level.

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


Wall St slips ahead of Fed announcement


U.S. stock indexes dipped on Wednesday ahead of a policy announcement by the Federal Reserve later in the day, as the latest readings on inflation solidified bets of a speedier wind-down of the central bank’s pandemic-era monetary stimulus. At 9:38 a.m. ET the Dow Jones Industrial Average was down 101.80 points, or 0.29 per cent, at 35,442.38, the S&P 500 was down 2.01 points, or 0.04 per cent, at 4,632.08 and the Nasdaq Composite was down 13.01 points, or 0.09 per cent, at 15,224.63.


European shares inch higher

Technology stocks helped drive gains in Europe’s major indices on Wednesday, ahead of the U.S. Federal Reserve’s policy outcome that is likely to signal a quicker withdrawal of its pandemic stimulus. The pan-European STOXX 600 was up 0.27 per cent after a five-session losing streak, which was last seen at the height of a pandemic-led rout in March 2020.


Tech View: Weakness to remain


Analysts suggested that Nifty50 could consolidate in a broad range of 17,000-17,700 going ahead. The index’s failure to break beyond its 20-day moving average also suggests selling pressure near these levels. Analysts suggested that the index could continue to take support around 17,200 points.


F&O: More selling ahead


In the derivatives segment, traders aggressively sold out-of-money put options of the Nifty50 index suggesting that they see more losses in the market going ahead. The 17,100 strike price put option saw the highest addition of open interest indicating that the level could be tested soon.


Stocks showing bullish bias


Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of NTPC, Borosil, Jain Irrigation, Kopran, and Narayana Hrudayalaya.

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 signalling weakness ahead


The MACD showed bearish signs on the counters of Hindustan Zinc, Inox Wind, Aegis Logistics, DB Realty, and Sobha. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.


Most active stocks in value terms


Paytm (Rs 1797 crore), BSE (Rs 1268 crore), Bajaj Finance (Rs 1256 crore), IEX (Rs 1084 crore), RIL (Rs 1029 crore), Kotak Bank (Rs 987 crore), TVS Motor (Rs 980 crore), Zee Entertainment (Rs 955 crore), Indiabulls Housing (Rs 949 crore) and Tata Motors (Rs 800 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with the highest trading turnovers in the day.


Most active stocks in volume terms


Vodafone Idea (Shares traded: 26.7 crore), YES Bank (Shares traded: 11.3 crore), Alok Industries (Shares traded: 4.7 crore), IEX (Shares traded: 4.1 crore), SAIL (Shares traded: 3.8 crore), BHEL (Shares traded: 3.7 crore), Suzlon Energy (Shares traded: 3.6 crore), Indiabulls Housing (Shares traded: 3.5 crore), and ITC (Shares traded: 3.5 crore) were among the most traded stocks in the session.


Stocks showing buying interest


Vardhman Textiles, Fine Organic Industries, Borosil Renewables, Brightcom Group, and Tata Tele witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.


Stocks seeing selling pressure


Star Health and SVP Global witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on these counters.


Sentiment meter favours bears


Overall, the market breadth remained in favour of the bears. As many as 158 stocks on the BSE500 index settled the day in the green, while 342 settled the day in the red.


Podcast: What to expect from Fed policy outcome?
Domestic equity markets continued to bleed on Wednesday ahead of the much-awaited US Fed policy meeting outcome. Other than this, the inflation scare and Omicron concerns strengthened the bears. Markets are suffering the wrath of foreign investors who are pulling out money rapidly. IT and metal stocks were the biggest drags, whereas auto stocks held higher. The BSE barometer Sensex dropped about 330 points to end the day below the 57,800 level. The index has lost more than 1,000 points in the last four sessions. What to expect from Fed policy outcome?



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