Here’s how analysts read the market pulse:
The price action for the last couple of sessions is developing as a Flag pattern on the hourly chart, said Gaurav Ratnaparkhi of Sharekhan, who believes the sideways action can continue in the range of 16,500-16,700 before the index prepares for the next leg up.
The present consolidation movement or minor downward correction could continue for the next 1-2 sessions that is likely to prepare a base for another round of sharp upmove in Nifty50 for the near term, said Nagaraj Shetti of HDFC Securities.
That said, here’s a look at what some key indicators are suggesting for Wednesday’s action:
Most stocks fall on Wall Street
U.S. stocks are falling Tuesday as Wall Street nears the end of a tumultuous month, bruised by worries about a possible recession, inflation and rising interest rates.
The S&P 500 was 0.9% lower in midday trading. The Dow Jones Industrial Average was down 270 points, or 0.8%, at 32,942, as of 11:34 a.m. Eastern time, and the Nasdaq composite was 0.8% lower.
Record high inflation pushes eurozone shares lower
Eurozone shares hit session lows on Tuesday after data showed inflation rose to a record high in May, spurring bets of bigger interest rate hikes by the European Central Bank (ECB).
Inflation in the 19 countries sharing the euro accelerated to 8.1% in May from 7.4% in April, beating expectations for 7.7% as price growth continued to broaden, indicating that it is no longer just energy pulling up the headline figure.
The STOXX index of eurozone shares dropped 1.3% and the pan-European STOXX 600 index, flat before the reading, fell 0.7%.
Tech View: Bullish candle
Nifty50 took a breather and formed a Long Legged Doji on the daily chart, suggesting indecisiveness among traders. Analysts said the uptrend remains intact even as they believe some sideways move is a possibility after the recent rally.
F&O: Support at 16,000
On the call side, the biggest open interest is at 17,000, followed by 17,200, meaning these are two resistance levels. On the put side, open interest converges at 16,000, 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 BSE, CAMS,
, Fine Organic, and Oil India.
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 GSPL, SIS India, Jamna Auto, Godfrey Phillips, Sun Pharma 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 8599 crore), (Rs 4749 crore), (Rs 3122 crore), (Rs 2848 crore), Kotak Bank (Rs 2758 crore), (Rs 2505 crore) and Infosys (Rs 2411 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: 45 crore), Zomato (Shares traded: 18 crore), (Shares traded: 14 crore), NTPC (Shares traded: 12 crore), JP Power (Shares traded: 8 crore) and Jindal Steel (Shares traded: 7 crore) were among the most traded stocks in the session on NSE.
Stocks showing buying interest
AIA Engineering, Fine Organic,
, , M&M, Pheonix Mills and HAL witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
Hikal, Equitas Small Finance, Jubilant Lifesciences,
, Anupam Rasayan and 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 1,741 stocks ended in the green, while 1,612 names settled with cuts.