Nifty traded in a wide range of 233 points in a volatile session and formed a bearish candle on the daily chart. Analysts said the index was forming indecisive candles for some time, which suggested more weakness in the coming days. Will Nifty get past the key resistance level of 15,800 or will it slip further?
Here’s how analysts read the market pulse:
Independent analyst Manish Shah said the way Nifty50 behaved in the latter part of the day suggests one must take precautions and cut some open trades. “The long bearish candle was wider than the candles of the last several sessions, which made him believe that sellers were in control now,” he said.
Ajit Mishra of Religare Broking advised taking extra caution in managing overnight risk and preferring low beta counters over others. “On the index front, the previous high zone around 15,400 would act as critical support in case of further correction, whereas 15,800 will continue to act as an immediate hurdle,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Thursday’s action:
US shares rise cautiously as analysts await fresh cues
Wall Street rose slightly on Wednesday, driven by gains in heavyweight technology stocks, although investors avoided big bets ahead of key inflation data this week and an upcoming Federal Reserve meeting. Buying into so-called “meme stocks” by small-time retail investors continued. GameStop – the company most closely associated with the retail rally this year – fell 1.3 per cent ahead of its quarterly results, due after the bell.
The S&P 500 was up 5.17 points, or 0.12 per cent, at 4,232.43. The tech stocks-heavy Nasdaq Composite was up 58.02 points, or 0.42 per cent, at 13,982.93. The Dow Jones Industrial Average was down 29.83 points, or 0.09 per cent, at 34,569.99.
European shares dip ahead of ECB meet
Attention remained on a European Central Bank meeting that could indicate how soon policymakers will begin to withdraw support for Europe’s economy as the COVID-19 crisis ebbs. The pan-regional STOXX Europe 600 index was 0.1 per centlower, with Britain’s FTSE down 0.2 per cent as UK-listed miners slipped under pressure from lower base metal prices.
F&O: VIX slips further
India VIX fell 3.07% from 15.22 to 14.75. The fear gauge is near its lowest level of last 17 months since February 2020 and a falling VIX could continue to make the market favourable for a buy-on-decline strategy. Now, The Nifty50 index has to cross and hold above 15,600 level to witness a bounce towards 15,750 and fresh lifetime high of 15,800 levels, while on the downside support exists at 15,550 and 15,400 levels.
Tech View: Nifty50 forms bearish candle after indecisive formations
Analysts said the index was forming indecisive candles for some time and hinting at a loss of momentum. Wednesday’s fall sent the NSE barometer below its immediate support at 15,680, suggesting weakness ahead, said analysts, who believe the 15,700-800 range will now be a key hurdle for the index going forward.
Check out the candlestick formations in the latest trading sessions
ETMarkets.com
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of
, Ircon International, , PTC India, Gujarat Industries, Bodal Chemicals, SBI Cards and Pay, Aarti Industries, Polyplex, SMS Pharmaceuticals, Suven Life Sciences, Rossell India, , Polycab India, SPML Infra, Pfizer, IFGL Refractories, Alpa Laboratories, Ausom Enterprise and .
The MACD is known for signalling 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
, Petronet LNG, SBI, Canara Bank, IDBI Bank, Spicejet, Engineers India, NLC India, MMTC, Axis Bank, Rain Industries, Wipro, Indian Hotels, HDFC Bank, UPL, IndusInd Bank, Orient Paper, PC Jeweller, Dhanuka Agritech, DCB Bank, Heidelberg Cement, Marico, Dhanlaxmi Bank, Shilpa Medicare, IOL Chemicals, Ujjivan Financial, BSE, KNR Constructions, MphasiS, Minda Industries, Colgate Palmolive, SIS, Bajaj Auto, Vikas Ecotech, Dollar Industries, Lovable Lingerie, Ruby Mills, Page Industries, MRF, Nilkamal, Automotive Axles, Honda India Power, and Sandesh. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Wednesday’s most active stocks in value terms
Tata Power (Rs 4,538.57 crore), Adani Power (Rs 3,044.74 crore), Adani Ports SEZ (Rs 2,714.43 crore), Tata Motors (Rs 2,080.46 crore), Adani Enterprises (Rs 1,870.48 crore), Indiabulls Housing Finance (Rs 1,647.07 crore), Tata Steel (Rs 1,233.47 crore), SBI (Rs 1,185.25 crore), BHEL (Rs 1,161.85 crore) and RIL (Rs 1,152.88 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 highest trading turnovers in the day.
Wednesday’s most active stocks in volume terms
Tata Power (Shares traded: 36.07 crore), YES Bank (Shares traded: 22.48 crore), JP Power (Shares traded: 22.24 crore), Vodafone Idea (Shares traded: 20.83 crore), Adani Power (Shares traded: 19.24 crore), JP Associates (Shares traded: 16.76 crore), BHEL (Shares traded: 15.11 crore), PNB (Shares traded: 14.97 crore), Bank of Baroda (Shares traded: 10.31 crore) and Suzlon Energy (Shares traded: 10.15 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Aarti Industries, Adani Power, Cipla, Crisil, GAIL (India), HCL Infosystems, Jindal Saw, JSW Energy, Mastek, NTPC, Tata Power, REC, Team Lease Service and Kalyan Jewellers India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Wednesday signalling bullish sentiment.
Stocks seeing selling pressure
Anmol India witnessed strong selling pressure and hit its 52-week low, signalling bearish sentiment on the counter.
Sentiment meter favours bears
Overall, the market breadth remained in favour of the bears. As many as 117 stocks on the BSE500 index settled the day in the green, while 379 settled the day in the red.
Podcast: What has triggered renewed interest in power stocks? >>>
We asked our expert what has really powered the renewed interest in power stocks. We also decode what caused to the steep fall on Dalal Street on Wednesday afternoon.
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