Monday, December 11, 2023

Ahead of Market: 10 things that will decide D-Street action on Monday

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Benchmark equity indices Nifty 50 and Sensex logged their third consecutive weekly gains, boosted by information technology (IT) stocks on easing global interest rate outlooks. The NSE Nifty 50 index gained 1.58% this week, its best in two months, while the Sensex rose 1.37%.Stocks of IT companies, which earn a significant share of their revenue from the US, climbed 5.07%, their best week in 16 months.

Here’s how analysts read the market pulse:”Considering the sharp rise in the previous couple of trading sessions and the Nifty reaching crucial resistance levels, short-term consolidation is likely. On the downside, 19,630 – 19,600 is the crucial support zone to watch out for and in case of a dip this zone is crucial to hold on for the uptrend to continue,” said Jatin Gedia of Sharekhan.

Rupak De, LKP Securities said, “Nifty has largely traded within a range, showing a predominantly bullish sentiment. Over the past two to three days, a ‘buy on dips’ approach has been loved by the street since the Nifty crossed the crucial 19,500 mark. The trend is expected to stay positive as the Nifty consistently concludes trading sessions above the critical moving averages. Support levels are situated at 19,630/19,500 on the lower end, while resistance is placed at 19,850/ 20,000 on the higher end.”

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

US market
Wall Street stocks concluded a positive week on a benign note Friday, shrugging off early losses and extending a rally amid hopes a slowing US economy will avert a recession.

Major indices secured a third straight week of gains after benign inflation data earlier in the week boosted expectations that the Federal Reserve will not enact additional interest rate increases. The broad-based S&P 500 ended at 4,514.02, up 0.1 percent for the day and 2.2 percent for the week.

The Dow Jones Industrial Average eked out a gain of less than 0.1 percent at 34,947.28, while the tech-rich Nasdaq Composite Index added 0.1 percent at 14,125.48.

European shares
European shares rose on Friday, boosted by financials and healthcare, ending the week higher on growing optimism that central banks will aggressively cut interest rates next year. The pan-European STOXX 600 rose 1.0%, ending the week 2.8% higher, as bond yields fell.

Tech View
Nifty on Friday ended 33 points lower to form two back-to-back candles with high upper shadows and indicate the presence of strong overhead resistance around 19,850 levels.

The positive chart pattern like higher tops and bottoms is intact as per the daily chart and Thursday’s swing high of 19,875 can be considered as a new higher top of the sequence. Hence, any decline from here could open a possibility of higher bottom formation around 19,600 -19,550 levels in the coming sessions, said Nagaraj Shetti of HDFC Securities.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade on the counters of Tata Investment, Indian Railway Finance Corporation, HDFC AMC, Birla Corporation, Rainbow Children’s Medicare, and Marico, 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 Metro Brands, P&G Health, WABCO India, Castrol India, Nazara Technologies, and Raymond among others. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
SBI (Rs 2,104 crore), HDFC Bank (Rs 1,780 crore), Bajaj Finance (Rs 1,500 crore), Axis Bank (Rs 1,326 crore), ICICI Bank (Rs 1,016 crore), RIL (Rs 916 crore), and TCS (Rs 709 crore), among others, 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
SBI (Shares traded: 3.7 crore), Tata Steel (Shares traded: 2.3 crore), Power Grid (Shares traded: 1.6 crore), Coal India (Shares traded: 1.3 crore), Axis Bank (Shares traded: 1.3 crore), ONGC (Shares traded: 1.3 crore), and HDFC Bank (Shares traded: 1.1 crore) among others were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of SBI Life, Apollo Hospital, L&T, Hero MotoCorp, Bajaj Auto, Tata Consumer, and Eicher Motors, 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 Rajesh Exports hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 1,926 stocks ended in the green, while 1,813 names settled in the red.

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(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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