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    stock market analysis: Ahead of Market: 10 things that will decide stock action on Monday

    stock market analysis: Ahead of Market: 10 things that will decide stock action on Monday


    Indian equities ended the last day of the week on a positive note amid positive developments in the global markets. At the close, Nifty notched levels of 18,200, with gains of 0.4% or 73 points. Broader markets on the other hand ended in the red, with Nifty Midcap 100 ending with marginal losses.

    Here’s how analysts read the market pulse:

    “The domestic market, though experiencing a lack of decisive direction, closed the day on a positive note. The optimism in the US market was fuelled by progress in debt ceiling talks and stronger-than-expected jobless claims. However, the prospect of a stronger US economy suggests that the Federal Reserve may keep policy rates elevated for an extended duration,” Vinod Nair, Head of Research at Geojit Financial Services, said.

    “The short term trend of Nifty remains choppy. The emergence of buying interest from the lows on Friday raises hopes for an upside bounce in the market. The confirmation of a bullish hammer pattern could pull Nifty towards the crucial resistance band of 18,400-18,500 levels again,”Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said.

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

    US markets close on a weak note

    US. stocks closed out the trading week on a soft note on Friday as early gains dissipated after US debt ceiling negotiations in Washington were paused, denting optimism a deal could be reached in coming days to dodge a default.

    The Dow Jones Industrial Average fell 109.28 points, or 0.33%, to 33,426.63, the S&P 500 lost 6.07 points, or 0.14%, to 4,191.98 and the Nasdaq Composite dropped 30.94 points, or 0.24%, to 12,657.90.

    European shares rise
    European stocks rose on Friday and Germany’s blue-chip index hit a record high as hopes of progress in US debt ceiling talks boosted risk sentiment, although negotiations appeared to have reached an impasse, moments after markets closed. The DAX, which houses Germany’s top 40 companies, closed 0.7% higher, after rising as far as 16,331.94 earlier in the day. The pan-European STOXX 600 index also rose 0.7% to a more than one-year high, with financial stocks leading gains.

    Tech View: Small Positive candle
    A small positive candle was formed on the daily chart with a long lower shadow. Technically this candle pattern indicates a formation of a bullish hammer type pattern. Normally formation of such hammer patterns post reasonable decline signals possible reversal on the upside post confirmation.

    Stocks showing bullish bias
    Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of ICICI Bank, Adani Enterprises, Indian Hotels, Adani Wilmar and Aptech 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 IDBI Bank, NTPC, ONGC, Orient Paper and GSFC among others.

    Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

    Most active stocks in value terms
    HDFC Bank (Rs 2500 crore), SBI (Rs 2436 crore), ICICI Bank (Rs 1463 crore), Adani Enterprises (Rs 1458 crore) and Infosys (Rs 1406 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
    Zomato (Shares traded: 7.36 crore), Suzlon Energy (Shares traded: 5.83 crore), YES Bank (Shares traded: 5.38 crore), Vodafone Idea (Shares traded: 4.99 crore) and PNB (Shares traded: 4.69 crore) among the most traded stocks in the session on NSE.

    Stocks showing buying interest
    Shares of Ramco Cements, Glenmark Pharma, CreditAccess Grameen, Max Healthcare and ABB Power among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

    Stocks seeing selling pressure
    Shares of Gland Pharma, Adani Gas, Aditya Birla Retail and Sumitomo Chemical among others hit their 52-week lows, signaling bearish sentiment on the counters.

    Sentiment meter favours bears
    Overall, market breadth favoured bears as 1,629 stocks ended in the green, while 1,819 names settled with losses.

    (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)



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