Manish Hathiramani, proprietary index trader and technical analyst at Deen Dayal Investments said, “We should now be headed to 14,800-14,900. Good support has been created at 14,200. Keeping that as a stop level, traders can time their long positions in the Nifty. A buy on dips strategy would be a prudent approach.”
“An optimistic western market aided the Indian market to touch lifetime highs with new buying in segments like auto, IT and PSU bank. So far, the Q3 results are better than forecasted and this has led to continued buying across sectors. Ahead of Joe Biden’s inauguration as President, the US market is in an upbeat mood with high expectations of a big US stimulus,” said Vinod Nair, Head of Research, Geojit Financial Services.
That said, here’s a look at what some of the key indicators are suggesting for Thursday’s action:
US stocks scale record highs as Biden takes office
The S&P 500 and the Nasdaq hit all-time highs on Wednesday as Joe Biden prepared to take charge as U.S. President, while Netflix shares surged after saying it will no longer need to borrow billions of dollars to finance its TV shows and movies. The Dow Jones Industrial Average rose 164.52 points, or 0.53%, to 31,095.56, the S&P 500 gained 36.94 points, or 0.97%, to 3,835.85 and the Nasdaq Composite gained 219.91 points, or 1.68%, to 13,418.23.
Tech, luxury stocks drive European shares higher
European stocks rose on Wednesday after chip equipment maker ASML and Swiss luxury group Richemont gave encouraging earnings updates, while investors hoped for a big U.S. fiscal relief package as Joe Biden takes over as the next president. The pan-European STOXX 600 index rose 0.70%, with the technology sector gaining 1.4% to its highest level in nearly two decades.
Tech View: Nifty forms bullish candle on daily chart
Nifty50 jumped on Wednesday and formed a bullish candle on the daily chart, for a second time in two days. Analysts said the fast retracement of the last leg of the fall is hinting that a short-term bottom is in place, and the index has resumed its rally after a brief halt. They expect the index to drift towards the 11,750-800 zone in the coming days. For the day, Nifty closed at 14,644, up 123.55 points or 0.85 per cent.
Check out the candlestick formations in the latest trading sessions
F&O: Volatility needs to cool down further
India VIX slipped 5.90% from 22.89 to 21.55 level. Volatility needs to cool down below the 20 level to commence a fresh leg of rally for the new lifetime high territory. However, volatility could be comparatively higher ahead of the Union Budget 2021. Call writing was seen at 15,000 and then 14,800 levels, while there was Put writing at 14,600 and 14,500 levels. Options data suggested a wider trading range between 14,200 and 15,000 levels, while the immediate trading range is between 14,500 and 14,800 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Wednesday showed bullish trade setup on the counters of Federal Bank, Apollo Tyres, Dewan Housing Finance Corporation (DHFL), Adani Ports & SEZ, Tata Chemicals, Indian Bank, The New India Assurance, Gateway Distriparks, Maruti Suzuki India, Sumitomo Chemical, Univastu India, RPG Life Sciences, Trent Ltd, Eris Lifesciences, Mahindra Logistics, Selan Exploration Technology Ltd, Siemens Ltd, Sasken Technologies, Man Industries, Saregama India, Harita Seating Systems, Jindal Poly Films, Tokyo Plast International and Rushil Decor.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of GAIL (India), Bharat Electronics, Power Grid Corp, Axis Bank, Alok Industries, LIC Housing Finance, Indraprastha Gas, Tata Communications, National Fertilizers, Polycab India, Suven Pharmaceutical, Triveni Turbine, BLS International Services, Steel City Securities, Kirloskar Brothers, Khadim India, Birla Cable, Apollo Pipes, Venus Remedies, India Power Corp, JK Cement, Suumaya Lifestyle, Thermax, Butterfly Gandhimathi, Karma Energy, GeeCee Ventures, Pioneer Distilleries, Jash Engineering and Kalyani Investment.
Wednesday’s most active stocks
Tata Motors (Rs 5569.49 crore), RIL (Rs 2906.53 crore), Bajaj Finance (Rs 1646.93 crore), Tata Steel (Rs 1609.94 crore), HDFC (Rs 1538.49 crore), TCS (Rs 1141.35 crore), Infosys (Rs 1100.92 crore), Wipro (Rs 1083.50 crore), SBI (Rs 1016.39 crore) and HDFC Bank (Rs 996.78 crore) were among the most active stocks on Dalal Street on Wednesday in value terms.
Wednesday’s most active stocks in volume terms
Tata Motors (Shares traded: 20.51 crore), YES Bank (Shares traded: 19.70 crore), Vodafone Idea (Shares traded: 19.60 crore), PNB (Shares traded: 13.22 crore), IDFC First Bank (Shares traded: 9.80 crore), Federal Bank (Shares traded: 7.14 crore), Bank of Baroda (Shares traded: 6.15 crore), GTL Infra (Shares traded: 4.49 crore), ITC (Shares traded: 4.47 crore) and BHEL (Shares traded: 4.06 crore) were among the most traded stocks in the session.
Stocks showing buying interest
MRF, Apollo Tyres, Minda Ind, Tata Motors and MindTree witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Wednesday signalling bullish sentiment.
Stocks seeing selling pressure
Antony Waste Handling Cell, Godha Cabcon & Insulation, Jump Networks, Kanpur Plastipack and Vishal Fabrics witnessed strong selling pressure in Wednesday’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 277 stocks on the BSE 500 index settled the day in green, while 216 settled the day in red.
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