NEW DELHI: Domestic indices on Friday attempted to come out of the rut they had been stuck for sometime now, but selling emerged on every rise, suggesting indecisiveness among investors and traders. The index formed higher highs and lows for the third session, and that held out hope.
Inflation in India eased to three-month low in April, but that wasn’t enough to lift sentiment on Dalal Street as lockdown risks fuelling price pressures. Nifty swung between red and green throughout the session.
India inflation is not a worry for markets. US inflation is.
Nifty carried forward its losing streak to the third day and traded in a narrow range to end the volatile session in the red. The index formed a Hammer-like candle on the daily chart. Analysts said the index will need to break above the 14,850 level to see an upside above 15,000-15,050.
“If the breakout range does manifest, Nifty50 should rally towards 15,450-15,500. Any decline towards 14,450-14,500 should be used to buy into the market with a stop below 14,200,” said independent analyst Manish Shah.
Nirali Shah, Head of Equity Research at Samco Securities, said the benchmark index is lacking directional move after a prolonged rally and is now contained within a consolidation range between 14,400 and 15,000. “Nifty50 has failed to retest the immediate resistance level of 15,000, as it is facing supply pressure at higher levels. We maintain bearish short-term outlook for Nifty till the immediate resistance level of 15,000 is broken,” she said.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:
US stocks end volatile week sharply higher
Wall Street closed higher in a broad rally, an upbeat conclusion to whipsaw week of buying and selling as signs of a rebounding economy squared off against mounting inflation jitters. All three major US indexes extended Thursday’s gains, which saw S&P 500 notch its biggest one-day percentage bump in over a month. The Dow Jones Industrial Average rose 360.68 points, or 1.06%, to 34,382.13, the S&P 500 gained 61.35 points, or 1.49%, to 4,173.85 and the Nasdaq Composite added 304.99 points, or 2.32%, to 13,429.98.
Europe shares end lower for the week
European stocks jumped on Friday, led by gains in energy and retail sectors after the Federal Reserve said there would be no imminent move to tighten monetary policy, easing fears of rising US inflation that pushed the STOXX 600 index into negative territory for the week. The pan-European STOXX 600 index rose 1.1%, with oil & gas and retail stocks leading the gains. The benchmark still fell 0.5% for the week as a rally in commodity prices and signs of quickening US inflation raised fears about an earlier-than-expected interest rate hike by the US Federal Reserve.
Tech View: Nifty50 sees buying near its 100-SMA
Nifty50 on Friday formed a Hammer-like candle on the daily chart and a small bearish candle on the weekly scale. During the session, the NSE barometer saw selling pressure near the 14,750 level. It broke below the 20-day exponential moving average (EMA), before buying emerged near the 100-day simple moving average (SMA), whose value is placed at 14,576 level. Mazhar Mohammad of Chartviewindia.in said the index saw some intraday recovery after retracing 62 per cent of its last leg of rally from the lows of 14,416-14,966.
Check out the candlestick formations in the latest trading sessions
F&O: VIX needs to hold below 20 to attract the bulls
India VIX moved up 0.93% from 20.08 to 20.26 level. India VIX needs to hold below the 20 level to again attract a bullish stance in the market. On the options front, maximum Put Open Interest stood at 14,000 level followed by 13,500, while maximum Call OI was seen at 15,000 level followed by 14,800. There was Call writing at strike prices 15,100 and 15,300, while Put writing was seen at 14,650 and 14,500 levels. Options data suggested a wider trading range between 14,400 and 15,000 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Tata Motors, Alok Industries, Asian Paints, M&M Financial Services, Biocon, KPIT Technologies, HDFC Life Insurance, Delta Corp, Hester Biosciences, Kabra Extrusion, Aavas Financiers, Bhagyanagar Properties and Arihant Superstructure.
The MACD is known for signalling 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 Adani Power, Granules India, Adani Enterprises, Indian Energy Exchange, Dr Reddy’s Labs, City Union Bank, Bodal Chemicals, Time Technoplast, ACC, MindTree, Vardhman Special Steels, Divi’s Lab, Tata Metaliks, Max Financial Services, KEI Industries, JB Chemicals & Pharma, Sarda Energy & Miner, Gujarat Fluorochem, GSS Infotech, Steel Exchange India, Intense Technologies, Srikalahasthi Pipes, Banco Products, Apar Industries, Blue Dart Express, Jubilant Industries, Mold-Tek Technologies, Mindteck (India), Sasken Technologies, Savita Oil Tech and WABCO India. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Friday’s most active stocks in value terms
Tata Steel (Rs 4,304.07 crore), UPL (Rs 4,248.06 crore), Asian Paints (Rs 2,917.88 crore), Tata Motors (Rs 2,586.97 crore), JSPL (Rs 2,244.77 crore), SAIL (Rs 1,896.70 crore), SBI (Rs 1,890.91 crore), JSW Steel (Rs 1,850.85 crore), Hindalco (Rs 1,580.33 crore) and Dr Reddy’s (Rs 1,572.70 crore) were among the most active stocks on Dalal Street on Friday in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.
Friday’s most active stocks in volume terms
PNB (Shares traded: 18.56 crore), Vodafone Idea (Shares traded: 17.15 crore), BHEL (Shares traded: 16.26 crore), SAIL (Shares traded: 14.76 crore), JP Power (Shares traded: 14.21 crore), Reliance Power (Shares traded: 10.80 crore), NALCO (Shares traded: 8.81 crore), Bank of Baroda (Shares traded: 8.69 crore), YES Bank (Shares traded: 8.57 crore) and South Indian Bank (Shares traded: 8.45 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Welspun India, Prince Pipes, UPL, KPIT Tech and Chambal Fertilisers witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
DSJ Communications, Globe Textiles, Isgec Heavy Engineering, Jump Networks, LCC Infotech and Suvidhaa Infoserve witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours the bears
Overall, the market breadth remained in favour of the bears. As many as 137 stocks on the BSE500 index settled the day in the green, while 361 settled the day in the red.
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