Ahead of Market: 12 things that will decide the stock market action on Wednesday – Economic Times

NEW DELHI: Nifty finished above the 11350 level on Tuesday and formed a strong bullish candle on the daily chart. Analysts said the recent breakout of consolidation could start a new rallying stage in the market.

Chandan Taparia of Motilal Oswal Financial Services said the index needs to continue to hold above 11,250 zones to see a rise to 11,500 and 11,600 levels while on the downside support exists in 11,200 to 11,150 zones.

Vinod Nair of Geojit Financial Services said that with liquidity and expectations overcoming valuation concerns, any market consolidation has been accepted and this trend is expected to continue.

Ajit Mishra of Religare Broking said markets will continue to draw inspiration from bullish global markets in the absence of a major event.

“In addition, discussions between the United States and China and the further development of AGR dues would also be the focus of concern,” he said.

That said, here’s a look at what some of the key indicators suggest for Wednesday’s action:

US stocks recover February highs, then retreat
The S&P 500 last hit record highs before the coronavirus crisis began in February on Tuesday, before receding on doubts about the prospects for a US economy still struggling to recover. The Dow Jones Industrial Average was down 124.10 points, or 0.45%, to 27,720.81, the S&P 500 was down 4.79 points, or 0.14%, to 3,377.20. The Nasdaq Composite rose 3.05 points, or 0.03%, to 11,132.78.

European stocks cut losses as travel stocks rebound
European stocks trimmed early losses on Tuesday as travel documents rebounded, but rising tensions between the US and China and disappointing results from mining group BHP weighed on sentiment. The pan-European STOXX 600 index edged up 0.1%, with travel and leisure stocks gaining 0.9% after suffering large losses earlier this week as many European countries imposed restrictions against a backdrop of resumption of coronavirus cases.

Tech View: Nifty Forms Strong Bullish Candle
Nifty50 broke through its crucial resistance zone at 11350-70 on Tuesday and analysts said the index now appeared to be heading towards the 11450 level. Nifty formed a strong bullish candle on the daily chart after forming indecisive charts during days, and closed above its 78.6% Fibonacci retracement level, adding to the positive momentum.

Check out the candlestick formations in the latest trading sessions


F&O: Lower volatility suggests bullish stance may continue
India VIX fell 4.13 percent to the 21.30 level. Volatility is gradually cooling down on a weekly basis and the decline in overall volatility suggests that the bullish stance may continue with a buy-bearish strategy in this market. Options data suggested a higher trading range between 11,200 and 11,600 levels for the next few days.

Stocks showing a bullish bias
Momentum Moving Average Convergence Divergence (MACD) indicator on Tuesday showed a bullish trade pattern on the counters of Axis Bank, Cholamandalam Investment, Bharat Heavy Electricals, Hindustan Copper, HDFC, Nelcast, Indian Overseas Bank, IIFL Securities, MSTC, Balmer Lawrie, UltraTech Cement, Karnataka Bank, Mayur Uniquoters, Ucal Fuel System, Ujaas Energy, Star Cement, Bata India, Bajaj Auto, Mirza International, Westlife Development, HDFC AMC, PI Industries, Navkar Corporation, Tata Communications, Andhra Paper, Srikalahasthi Pipes , Panama Petrochem, Sterling Tools, Chemfab Alkalis, Kitex Garments, Century Enka, Manaksia Steels, AGC Networks, STL Global, Anik Industries, Zota Healthcare, Tasty Bite and Greenlam Industries, among others.

Stocks signal weakness ahead
The MACD showed bearish signs on the counters of Alok Industries, Sun Pharma, PC Jeweler, LT Foods, Greaves Cotton, Caplin Point, Sunflag Iron, FDC, Natco Pharma, AVT Natural Products, IndiaMART InterMESH, Atul, SMS Lifesciences Industries and VST Industries. The bearish cross on the MACD on these counters indicated that they had just started their downward journey.

Most active stocks by value
RIL (Rs 2986.28 crore), Bajaj Finance (Rs 1601.80 crore), HDFC Bank (Rs 1255.72 crore), Grasim Industries (Rs 1030.26 crore), ZEEL (Rs 1022.39 crore), ICICI Bank (Rs 970.84 crore), Axis Bank (Rs 960.48 crore), Maruti Suzuki (Rs 908.09 crore), SBI (Rs 896.27 crore) and InterGlobe Aviation (Rs 874.95 crore) were among the most active stocks on Dalal Street on Tuesday in value. Higher activity on a meter in terms of value can help identify meters with the highest turnover in the day.

Most active stocks in volume
YES Bank (shares traded: 40.41 crore), Vodafone Idea (shares traded: 17.95 crore), Ashok Leyland (shares traded: 10.22 crore), IDFC First Bank (shares traded: 6.48 crore), Tata Motors (shares traded: 6.21 crore), ZEEL (shares traded: 5.92 crore), NTPC (shares traded: 5.20 crore), SBI (shares traded: 4.63 crore), DLF (shares traded: 3 , 92 crore) and CG Power (shares traded: 3.85 crore) were among the largest shares traded in the session.

Actions arousing buying interest
Birlasoft, KIOCL, Aditya Birla Fashion (PP), IOL Chemicals and Hatsun Agro witnessed strong buying interest from market participants as they raised their new 52-week highs on Tuesday, signaling sentiment bullish.

Stocks are under selling pressure
Mittal Life Style saw strong selling pressure during Tuesday’s session and its 52-week lows, signaling bearish sentiment on this meter.

Sentiment gauge favors bulls
Overall, the breadth of the market has remained in favor of the bulls. No less than 371 shares of the BSE 500 index settled the day in green, while 128 settled it in red.

Podcast: What do the Nifty tech graphics suggest now? >>>
National stock indexes saw strong momentum on Tuesday, led by private banks and index heavyweights such as RIL, Infosys and HDFC Bank. Unlike recent sessions, where each rise triggered a reserve of earnings, domestic stocks continued to take advantage of gains from a modest start to settle into the day’s high. Sensex closed 477 points higher at 38,528, while Nifty rose 138 points to 11,385. We sat down with Ajit Mishra of Religare Broking to try to understand the underlying market.

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