Ahead of Market: 10 things that will decide stock action on Monday

After the US inflation figures came in softer-than-expected, benchmark indices taking note of buoyant global mood, notched new 52-week highs on both Sensex and Nifty in Friday’s session.

Here's how analysts read the market pulse:
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, “Indian equities witnessed a smart rally in line with its global peers after the US inflation cooled to 7.7% in the month of Oct '22. Nifty opened gap up and remained strong throughout the session to close with gains of 323 points (+1.8%) at 18352 levels. HDFC twins led the gains following the expectation of increase in weightage in MSCI index post-merger.

Rupak De, Senior Technical Analyst at LKP Securities said, "The Nifty remained strong during the day following a gap-up start. On the daily chart, the index has moved above the previous consolidation. The trend looks positive as long as the 18,300 level is held on a closing basis. On the higher end, it may move towards 18600 over the near term. On the lower end, support is pegged at 18200/18000."

That said, here’s a look at what some key indicators are suggesting for Monday’s action:
US market
The S&P 500 closed out its best week since June as a report on Thursday showing slowing inflation raised hopes that the Federal Reserve would soon slow its tightening campaign. The broader market index added 0.9%, to close at 3,992.93. This brought its gain for the week to 5.9%. The Nasdaq Composite added about 1.9% to end at 11,323.33 as investors snapped up tech shares on hopes interest rates would ease. The Dow Jones Industrial Average gained 0.1%, closing at 33,747.86.

European shares
The pan-European Stoxx 600 closed fractionally above the flatline on Friday , having given up earlier gains of around 0.7%. Basic resources ended 2.6% higher while health care stocks fell 2.4%. The European blue chip index closed 2.8% higher on Thursday after the release of the US consumer price index, which sent major averages stateside to their biggest one-day rallies since 2020.

Tech View: Long bull candle
Nifty formed a long bull candle on the daily chart. On the weekly scale, a bull candle with a long lower shadow was noticed. Analysts now see increasing probability of Nifty hitting record high levels around 18,600 level.Indicators like RSI and MACD also indicated positive direction in the market.

Stocks showing bullish bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trend in the counters of NHPC, HFCL, Infosys, HCL and DB Realty among others.

The MACD is known for signaling 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 signaling weakness ahead
The MACD showed bearish signs on the counters of Indian Hotels, Federal Bank, NTPC, Orient Paper and Zydus Lifesciences among others.

Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value term
HDFC Bank (Rs 4537 crore), Zomato (Rs 2808 crore), HDFC ((Rs 2535 crore), and Axis Bank (Rs 1643 crore) were among the most active stocks on NSE in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.

Most active stocks in volume terms
Zomato( Shares traded: 39.77 crore), Yes Bank (Shares traded: 11.29 crore), Vodafone Idea (Shares traded: 9.32 crore), Tata Steel (Shares traded: 7.79 crore) and PNB (Shares traded: 7.65 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Cochin Shipyard, Godfrey Philips, Akzo Nobel, Aegis Logistics and Kalpataru Power among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Quess Corp, GSK Pharma, Bandhan Bank and Natco Pharma among others witnessed strong selling pressure and hit its 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured losers as 1,756 stocks ended in the green, while 1,690 names ended in the red.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)