Ahead of Market: 12 things that will decide D-Street action on Friday

NEW DELHI: Indian stocks have seen some recovery in the market as investors grabbed the stocks at low valuations, but choppiness continues. Analysts also believe this is the right time to pick quality stocks at cheap valuation.

Here’s how analysts read the market pulse:

“The technical structure construes to be encouraging, as Nifty50 has been hovering in a slender range for the last couple of trading sessions and is attracting buying interest at the lower levels. The index has formed a strong ‘bullish engulfing pattern on the day of weekly expiry, which is an intriguing factor for the bulls,” Osho Krishan of Angel One.

Mazhar Mohammad of Chartviewindia.in said the index needs a close above 16,750, where the 200-day EMA is placed, for a sustainable up move.

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

S&P 500 down as Microsoft slips
The S&P 500 and the Dow lost ground on Thursday after Microsoft made a surprise cut to its earnings outlook and comments from a Federal Reserve official quashed recent optimism about an eventual pause in the central bank’s rate hike moves.

Microsoft fell 2.4% after the company became the latest U.S. corporation to warn of a hit to its profits from a stronger dollar. It cut its fourth-quarter forecasts for both profit and revenue.

At 10:45 a.m. ET, the Dow Jones Industrial Average was down 177.06 points, or 0.54%, at 32,636.17, the S&P 500 was down 9.34 points, or 0.23%, at 4,091.89, and the Nasdaq Composite was up 36.32 points, or 0.30%, at 12,030.78.

European shares rise cautiously

European shares bounced back on Thursday, led by tech and healthcare names, with gains limited by a slide in energy stocks and worries over slowing economic growth.

The pan-European STOXX 600 index rose 0.4% by 0719 GMT. Volumes are expected to be subdued as London markets are closed for Queen Elizabeth’s Platinum Jubilee bank holidays.

Tech View: Bullish candle
Nifty50 closed above the 16,600 level, forming a bullish candle on the daily chart. Analysts said it may face some resistance around its 200-day EMA, placed near the 16,750 zone, while they continue to see the 16,400 level act as an immediate support zone.

F&O: Support at 16,000
On the call side, the biggest open interest is at 17,000, followed by 16700, meaning these are two resistance levels. On the put side, open interest converges at 16,600, followed by 16,500, providing support.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of Thermax, Mazagon Dock,

, , L&T Financial Holdings 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

, Bajaj Auto, Thyrocare Tech, HUL and . A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms

(Rs 2758 crore), (Rs 1602 crore), Raymond (Rs 1286 crore), Infosys (Rs 1079 crore), TCS (Rs 905 crore), Tata Steel (Rs 848 crore) and (Rs 818 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 the highest trading turnovers in the day.

Most active stocks in volume terms

(Shares traded: 13 crore), (Shares traded: 10 crore), Adani Power (Shares traded: 5 crore), JP Power (Shares traded: 5 crore), Zomato (Shares traded: 5 crore) and (Shares traded: 4 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Fine Organic,

, , Blue Dart, M&M, and witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Hikal, Thyrocare Tech, Lux Industries, Equitas SFB and Ipca Labs witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured gainers as 1,909 stocks ended in the green, while 1,395 names settled with cuts.

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