10 things that’ll decide stock action on Monday

In the week gone by, the headline index Nifty ended only 80 points up while the Sensex shot up nearly 180 points to end higher for the second consecutive week at 15,752.05 points. Market experts citing the recent fall in the global indices say that the recent consolidation phase indicates caution.

Here’s how analysts read the market pulse:

Naraj Shetti, Technical Research Analyst, HDFC Securities, said the short-term trend of Nifty continues to be range-bound. “But Friday’s sharp upside recovery from the lows hints at the possibility of more upside for the market ahead. A sustainable upmove above 15,900-15,950 levels could bring bulls back into the market and that could possibly pull the Nifty towards the next upside levels of 16,200-16,300 levels quickly. Immediate support is placed at 15,630,” he said.

Gaurav Ratnaparkhi of Sharekhan said even as the index started the week on a strong note, it could not build upon the gains.

“It witnessed consolidation throughout the week. Near term support zone was placed around 15,700-15,650, which the index breached on July 1. However, it received support near 15,500. Overall structure shows that the index is likely to witness consolidation in the range of 15,500-15,900 in coming sessions,” Ratnaparkhi said.

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

US shares mint big gains

Wall Street bounced back to a sharply higher close in light trading on Friday as investors embarked on the second half of the year ahead of the long holiday weekend. All three major U.S. stock indexes reversed early losses to end well into positive territory in the wake of the stock market’s worst first half in decades.

The Dow Jones Industrial Average rose 321.83 points, or 1.05%, to 31,097.26, the S&P 500 gained 39.95 points, or 1.06%, to 3,825.33 and the Nasdaq Composite added 99.11 points, or 0.90%, to 11,127.85.

European shares end flat

European shares closed flat on Friday, as gains in defensives countered a sell-off in semiconductor and commodity-linked stocks, while investors prepared for the European Central Bank’s (ECB) first interest rate hike in more than a decade this month. The pan-European STOXX 600 index (.STOXX) lost 0.02%.

Tech View: Harami candle on weekly chart

Nifty50 on Friday formed a Hammer-like candle on the daily chart. On the weekly scale, it made a bearish candle with a long lower wick. Analysts said the index is in a consolidation range, wherein it has strong support in the 15,500-15,600 range and hurdle in the 15,900-950 range. A decisive breach on either side can set the market trend going ahead, they said.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of

, , , Cipla and .

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

, , and Nava Bharat Ventures. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

Reliance Industries, ONGC, ITC, Titan, and 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

ONGC, Zomato,

, and were among the most traded stocks in the session on NSE.

Stocks showing buying interest

Shares of ITC witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Vedanta, Star Health, and witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls

Overall, market breadth favoured winners as 1,652 stocks ended in the green, while 1,630 names settled with cuts.

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