Nirali Shah, senior research analyst at Samco Securities, said, “The week remained highly volatile which could continue unless Nifty breaks below the 14,200 mark — its immediate support in the short term. A break below the same can trigger a huge profit-booking move to 13,100 on the downside.”
That said here’s a look at what some of the key indicators are suggesting for Monday’s action:
US stocks close lower as coronavirus concerns rise
The Dow and S&P 500 ended modestly lower on Friday, dragged down by losses in blue-chip technology stalwarts Intel and IBM following their quarterly results, as hopes for a full economic reopening in the coming months waned. The Dow Jones Industrial Average fell 0.57% the S&P 500 lost 0.30% and the Nasdaq Composite added 0.09%.
European stocks sapped by weak economic data, travel curbs
European stocks ended lower on Friday, closing out another lacklustre week as business activity in the euro zone shrank in January after stringent lockdowns to control the coronavirus pandemic shuttered many businesses. The pan-European STOXX 600 index fell 0.6%, but clung to a small 0.2% rise for a week, dominated by hopes for massive U.S. stimulus under President Joe Biden. The auto-heavy German DAX fell 0.2%, France’s CAC 40 dropped 0.6%, and euro zone stocks were down 0.6%.
Tech View: Nifty50 selling at high levels makes analysts cautious
Analysts said the market action of the last two sessions has replicated the pattern of Nifty50 weakness seen on January 15 and January 18. They are cautious, even as they believe a small pullback cannot be ruled out. Mazhar Mohammad, Chief Strategist at Chartviewindia.in, said that the index formed a shooting star candle on the weekly charts. He believes that if the Nifty50 slips below 14,350 level, eventually it should slide down all the way towards the 13,950 level.
Check out the candlestick formations in the latest trading sessions
F&O: Doji on Nifty charts, rising VIX signal market’s bearish bias
India VIX moved up 1.09 per cent from 22.18 to 22.42 levels. Volatility needs to cool down below 20 level to commence the fresh leg of rally for a new lifetime high. However, volatility could be comparatively higher ahead of Budget 2021. On the options front, maximum Put Open Interest stood at 14,000 level followed by 13,500, while maximum Call OI is at 15,000 followed by 14,500 levels. There was Call writing at strike prices 14,500 and 14,700, while there was Put writing at 13,800 and 14,000 levels. Options data suggested a wider trading range between 14,000 and 14,800 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Future Consumer, Cyient, Jain Irrigation, Adani Transmission, Elgi Rubber, Orient Electric, Shree Digvijay, Birla Tyres, HSIL, Whirlpool of India, Cosmo Films, TVS Srichakra, Blue Dart Express, Rushil Decor and Sundaram Clayton.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of PNB, ITC, Wipro, HPCL, BPCL, HDFC Bank, Bank of India, United Spirits, Piramal Enterprises, Aditya Birla Fashion, Maruti Suzuki India, among others.
Friday’s most active stocks
Tata Motors (Rs 9,364.79 crore), Bajaj Auto (Rs 3,436.44 crore), RIL (Rs 2,916.00 crore), Bajaj Finance (Rs 1,558.49 crore), Tata Steel (Rs 1,546.59 crore), Apollo Tyres (Rs 1,511.14 crore), Axis Bank (Rs 1,391.36 crore), ICICI Bank (Rs 1,323.85 crore), Asian Paints (Rs 1,322.88 crore) and HDFC (Rs 1,315.27 crore) were among the most active stocks on Dalal Street on Friday in value terms.
Friday’s most active stocks in volume terms
Vodafone Idea (shares traded: 35.91 crore), Tata Motors (shares traded: 31.60 crore), YES Bank (shares traded: 22.07 crore), PNB (shares traded: 13.36 crore), SAIL (shares traded: 12.07 crore), GTL Infra (shares traded: 8.82 crore), JK Tyre (shares traded: 7.76 crore), Ashok Leyland (shares traded: 7.16 crore), Apollo Tyres (shares traded: 6.55 crore) and BHEL (shares traded: 5.89 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Cyient, Bajaj Auto, Minda Industries, Sundaram Clayton and Apollo Tyres witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday, signalling bullish sentiment.
Stocks seeing selling pressure
Acrysil, Antony Waste Handling Cell, Dangee Dums, Jump Networks and Vishal Fabrics witnessed strong selling pressure in Friday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, market breadth remained in favour of bears. As many as 116 stocks on the BSE 500 index settled the day in green, while 382 settled the day in red.
Podcast: Are banking stocks most vulnerable now?>>>
Are banking stocks the most vulnerable in a volatile market? As the dollar index, foreign flows and the policy of the central banks continue to be in Dalal Street’s favour, should traders book profit on every rise this week? We find out this and more in today’s special podcast with independent market expert Rajiv Nagpal.