market outlook: Ahead of Market: 12 things that will decide stock action on Wednesday

NEW DELHI: As Nifty ended higher for the third straight session on Tuesday, it formed a small bullish candle on the daily chart.

Chandan Taparia of Motilal Oswal Financial Services said, the index has to hold above 11,800-11,820 zones to witness an up move towards 12,000 and 12,100 zones, while on the downside, support exists at 11,750 then 11,666 levels.

Vinod Nair of Geojit Financial Services said, volatility is expected going forward, but the market will maintain its optimism in-line with stock-wise Q2 result, size of the domestic stimulus and global developments.

Ajit Mishra of Religare Broking said, markets are closely following global cues and indications are still mixed on that front.

“Despite the positive bias, we might continue to see volatile swings; so traders should prefer hedged positions and maintain their focus on the selection of stocks,” he said.

That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
US stocks climbs with focus on stimulus

Wall Street’s main indexes rose on Tuesday as investors hoped for more stimulus from Washington, with Senate Republicans preparing to vote on a bill to help small businesses hammered by the COVID-19 pandemic. The Dow Jones Industrial Average was up 177.90 points, or 0.63%, at 28,373.32, the S&P 500 was up 23.91 points, or 0.70%, at 3,450.83. The Nasdaq Composite was up 70.89 points, or 0.62%, at 11,549.77.

European shares edge higher as earnings counter lockdown worries
European stocks inched higher on Tuesday as strong earnings from Swiss bank UBS, consumer giant Reckitt Benckiser and others offset concerns from tighter coronavirus curbs across the continent and doubts over fresh US stimulus. The pan-European STOXX 600 rose 0.2%, reversing from losses at the open.

Tech View: Nifty forms small bullish candle
Nifty50 on Tuesday climbed for the third session in a row, but could not reclaim the 11,900 level on a closing basis. The index formed a small bullish candle on the daily chart with a long upper wick, as it could not hold above the key resistance at 11,950. A breach of the 11,950-12,025 zone would be crucial for the index to see further upside, analysts said. Any strong downside looks unlikely for now, they added.

Check out the candlestick formations in the latest trading sessions

F&O: Rising VIX still a worry
India VIX moved up 3.99 per cent from 21.82 to 22.69 levels. It needs to cool down below 19 mark for the market to stabilise but volatility may rise ahead of the US election. Options data suggested a wider trading range between 11,500 and 12,000 levels, while the immediate trading range lies between 11,750 and 12,000 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of NTPC, HDFC Life Insurance, BPCL, Dabur India, REC, Rail Vikas Nigam, Oberoi Realty, NBCC (India), Balrampur Chini, Praj Industries, Asian Paints, Delta Corp, NHPC, Kajaria Ceramics, Voltas, Avenue Supermarts, Dwarikesh Sugar, Cyient, Orient Cement, DCB Bank, Heidelberg Cement, FACT, Berger Paints, TCPL Packaging, Kothari Products, Summit Securities, TIL and GRP among others.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Shrenik, Hero MotoCorp, Eicher Motors, Bajaj Auto, Coforge, Welspun Corp, CSB Bank, Den Networks, Aditya Birla Money, J B Chemicals, Cigniti Technologies, Godrej Agrovet, IZMO, Shivam Autotech, Kalyani Steel, Themis Medicare, TeamLease Service and Pearl Global Industries among others.

Tuesday’s most active stocks
HCL Tech (Rs 1888.22 crore), RIL (Rs 1847.11 crore), HDFC Bank (Rs 1669.77 crore), HUL (Rs 1274.51 crore), Larsen & Toubro (Rs 1220.03 crore), Infosys (Rs 1187.51 crore), Britannia Inds. (Rs 1141.11 crore), ICICI Bank (Rs 1082.30 crore), Bajaj Finance (Rs 1060.10 crore) and Bharti Airtel (Rs 1054.67 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.

Tuesday’s most active stocks in volume terms
Vodafone Idea (shares traded: 37.58 crore), Federal Bank (shares traded: 4.61 crore), SBI (shares traded: 3.93 crore), Bank of Baroda (shares traded: 3.80 crore), YES Bank (shares traded: 3.63 crore), Vedanta (shares traded: 3.57 crore), ZEEL (shares traded: 3.25 crore), Tata Motors (shares traded: 2.75 crore), ICICI Bank (shares traded: 2.62 crore) and Bharti Airtel (shares traded: 2.59 crore) were among the most traded stocks in the session.

Stocks seeing buying interest
JK Cement, Tata Communications, Asian Paints, JSW Steel and Ambuja Cements witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.

Stocks seeing selling pressure
WABCO India, Archidply Decor, Angel Broking, Sintercom India and Zee Learn witnessed strong selling pressure in Tuesday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 260 stocks on the BSE 500 index settled the day in green, while 231 settled the day in red.

Podcast: Time to stay cautious after 3 days of gains? >>>
Robust buying in banking and IT stocks led the benchmark indices higher for the third consecutive day today. HDFC Bank, Infosys, HCL Technologies, TCS and Asian Paints led the gains, some selling in Reliance Industries and HDFC capped the upside. Overall, Sensex closed nearly 113 points higher at 40,544, while Nifty settled around 23 points higher at 11,896. In the last 14 sessions, the indices have closed in the green in 13 instances. We caught up with Ajit Mishra of Religare Broking to try and understand the market undercurrent.

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