Tuesday, December 12, 2023

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

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Indian shares advanced on Monday, in step with Asian peers, after US jobs data heightened hopes that the Federal Reserve will not hike rates any further.The NSE Nifty 50 index settled 0.94% higher at 19,411, with 45 constituents in the green. The S&P BSE Sensex rose 0.92% to 64,958.

Here’s how analysts read the market pulse:
“Nifty is currently trading around the upper end of the reverse channel, which can act as a make or break from a short-term perspective. A decisive close above the falling channel can lead to further extension of the current rally. However, there are multiple resistance parameters in the form of the key daily moving averages in the range (19400 – 19500) which can restrict further upside. In terms of levels, 19240 – 19300 shall act as a crucial support zone while 19500 – 19550 is the immediate hurdle zone,” said Jatin Gedia, Sharekhan by BNP Paribas.Rupak De, LKP Securities, said, “On the upper side, the rally encountered resistance at the 21-day moving average (21DMA). It is anticipated that the trend will continue to move sideways in the near term. A decisive breakthrough above 19,450 points could potentially pave the way for a Nifty rally. On the lower end, support is situated at 19,300 points.”

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

US market

Wall Street‘s main indexes edged higher in early trade on Monday as investors geared up for commentary by a slew of policymakers later in the week which is likely to provide clarity on whether the Federal Reserve could cut rates next year.

Shares of Tesla were a big boost, up 1.1% after a source told Reuters the electric automaker plans to build a 25,000-euro ($26,838) car at its factory near Berlin. Seven of the 11 major S&P 500 sectors climbed, with information technology and consumer discretionary leading gains.At 9:47 a.m. ET, the Dow Jones Industrial Average was up 21.60 points, or 0.06%, at 34,082.92, the S&P 500 was up 5.99 points, or 0.14%, at 4,364.33, and the Nasdaq Composite was up 52.21 points, or 0.39%, at 13,530.50.

European shares
European shares were subdued on Monday after the benchmark index posted its biggest weekly jump since March, while Ryanair hit a one-month high following record annual profit.

The pan-European index edged up 0.1% by 0810 GMT after jumping more than 3% last week, as investors cheered a string of robust earnings and signs of an end to monetary policy tightening by major central banks.

Tech View: Bull candle
Nifty on Monday ended 181 points higher to form a reasonable bull candle with minor upper and lower shadow on the daily charts. The daily momentum indicator has a positive crossover which is a buy signal.

The immediate resistance of 18250 has been taken out sharply on the upside on Monday and the market is now advancing towards the next overhead resistance of around 19550-19600 levels in the short term. Immediate support is placed at 19320 levels, said Nagaraj Shetti of HDFC Securities.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Amber Enterprises, Suzlon Energy, FIve-Star Business Finance, Tata Elxsi, Essel Propack, and Adani Green 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 Nestle India, Marico, Vijaya Diagnostic, and MRF 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 1,904 crore), RIL (Rs 1,242 crore), ICICI Bank (Rs 974 crore), SBI (Rs 949 crore), Tata Motors (Rs 698 crore), Axis Bank (Rs 660 crore), and Divi’s Labs (Rs 618 crore) among others were 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
Tata Steel (Shares traded: 2.7 crore), SBI (Shares traded: 1.6 crore), HDFC Bank (Shares traded: 1.3 crore), Tata Motors (Shares traded: 1 crore), Coal India (Shares traded: 1 crore), ICICI Bank (Shares traded: 1 crore), and Power Grid Corp (Shares traded: 98 lakh) among others were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Zomato, Amber Enterprises, Kalyan Jewellers, Suzlon Energy, Crisil, CDSL, and Jindal Saw among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
None of the major stocks hit their 52-week lows on Monday.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 2,422 stocks ended in the green, while 1,381 names settled in the red.

(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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