Ahead of Market: 12 things that will decide stock action on Monday

Ahead of Market: 12 things that will decide stock action on Monday

NEW DELHI: On the weekly scale, headline index Nifty saw a 250-point range-bound movement last week and formed a small bullish candle.

Rohit Singre, Senior Technical Analyst at LKP Securities, said, “The index has formed good support at the 15K mark. Any dip near the said level will again be a buying opportunity for overall target in the 15,250 zone which is a strong hurdle on the higher side. The current range is in the 15,000-15,250 zone.”

“Risk appetite trickled down and equities pared gains with several cities across the globe entering fresh lockdowns. Oil’s winning streak was also broken following IEA’s bleaker demand outlook. Indian equities were in the green in the first half with Bank Nifty rising over 1 per cent, but VIX rose in the second half, and traders opted to cut down long bets across sectors, going into the weekend,” said Anand James, Chief Market Strategist at Geojit Financial Services.

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

S&P 500 hits record peak as stocks post weekly gain
The S&P 500 and Nasdaq set record closing highs on Friday as investors bought energy, financial and materials shares and sold big tech stocks in anticipation of new fiscal aid from Washington to help the U.S. economy recover. U.S. stock markets will be closed on Monday for the Presidents’ Day holiday. The Dow Jones Industrial Average rose 0.09%, the S&P 500 gained 0.47%, and the Nasdaq Composite added 0.5%.

ASML, L’Oreal guide European shares to three-week highs
European shares reversed earlier losses to close higher on Friday, led by ASML and L’Oreal, although a dip in Volkswagen weighed on Germany’s main index. The pan-European STOXX 600 index closed up 0.6% at a three-week high for a second straight week of gains. Germany’s DAX underperformed, ending flat as carmaker Volkswagen slipped 0.7% after the company said deliveries slid in January. Gains in Spain’s IBEX were capped after data showed consumer prices rising slightly below expectations in January. London’s FTSE 100 index erased early losses to rise 0.9% with healthcare stocks in the lead.

Tech View: Nifty forms indecisive Doji
Nifty50 on Friday formed a Doji candle on the daily charts. The index continued to consolidate in a range, as traders looked undecided on the direction of the market amid weak global cues. “Nifty has been consolidating in the 15,250-15,000 range for the past five sessions, signalling a short-term sideways trend. In weekly price action, the index formed a small bullish candle and higher highs and lows compared with those in the previous week. It has also closed above the previous week’s high, which signals sustained strength,” said Rajesh Palviya of Axis Securities.

Check out the candlestick formations in the latest trading sessions


F&O: Nifty charts show buying on dips
India VIX fell 4.33% from 23.04 to 22.04. Now, VIX needs to cool down and hold below 21 level for the continuation of the ongoing momentum with a higher market base. On the options front, maximum Put open interest stood at 14,000 level followed by 14,500, while maximum Call OI was seen at 15,500 followed by 16,000 level. There was Put writing at 14,500 and 15,100 levels while Call writing was seen at 15,500 and 15,800 levels. Option data suggested a wider trading range between 14,500 and 15,500 levels, while the immediate range was seen between 15,000 and 15,300 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Tata Motors, IDFC First Bank, Adani Power, PC Jeweller, Laurus Labs, Dabur India, JSW Energy, Geojit Financial Services, Asian Paints, Arvind Fashions, and others.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Ashok Leyland, RBL Bank, Hindustan Petroleum, Sun TV Network, Fortis Healthcare, Indiabulls Real Estate, Aurobindo Pharma, Schneider Electric, Suven Pharmaceutical, Wockhardt, and others.

Friday’s most active stocks
RIL (Rs 2,885.11 crore), Motherson Sumi (Rs 2,420.16 crore), ITC (Rs 2,418.35 crore), SBI (Rs 2,102.49 crore), Tata Motors (Rs 2,091.70 crore), Adani Ports SEZ (Rs 1,513.47 crore), IndusInd Bank (Rs 1,455.36 crore), MRF (Rs 1,264.56 crore), IRCTC (Rs 1,235.52 crore) and ICICI Bank (Rs 1,222.21 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: 42.18 crore), PNB (Shares traded: 15.85 crore), Motherson Sumi (Shares traded: 12.81 crore), ITC (Shares traded: 11.06 crore), Ashok Leyland (Shares traded: 7.96 crore), Tata Motors (Shares traded: 6.41 crore), SBI (Shares traded: 5.36 crore), Bank of Baroda (Shares traded: 4.85 crore), YES Bank (Shares traded: 4.75 crore) and IDFC First Bank (Shares traded: 4.55 crore) were among the most traded stocks in the session.

Stocks showing buying interest
JK Cement, Motherson Sumi, Adani Enterprises, Happiest Minds and Adani Transmission witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday, signalling bullish sentiment.

Stocks seeing selling pressure
Jiya Eco-Products, Novartis India and Sanwaria Consumer 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 181 stocks on the BSE 500 index settled the day in green, while 315 settled the day in red.

Podcast: Has pharma rally run out of steam? >>>

After a bearish phase in 2014, pharma stocks rebounded last year amid the Covid crisis and many of them more than doubled investors’ money in 2020. And now, as the Covid graph dips and the vaccination drive takes off, investors have started booking profits on the pharma counter. Both the BSE healthcare and Nifty Pharma indices are now in the negative zone on a year-to-date basis, after a stupendous rally in 2020. Has the sectoral rally run out of steam? We discuss money-making opportunities in the pharma sector in today’s special podcast with independent market expert Rajiv Nagpal.

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