Ahead of Market: 10 things that will decide D-St action on Tuesday

NEW DELHI: Nifty today fell for the second consecutive day after rallying non-stop for eight days. While Sensex ended 872 points lower, Nifty ended below the 17,500 mark on Monday. All the sectors ended in red with metals and realty falling more than 2%. India VIX gained 4% to 19 levels.

Here's how analysts read the market pulse:

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said the next support to be watched is around 17,330 (23.6% fibonacci retracement of June to Aug rising leg) in the next few sessions. “On the move below, the next support of 38.2% retracement is placed at 16,900 levels. Immediate resistance is at 17,600 levels,” he said.

Vinod Nair, Head of Research at Geojit Financial Services, said the current risk-reward is not favouring investors as Nifty50 is now trading at a premium valuation of 21.5x P/E (1-year forward basis),
above the long-term average.

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

US stocks retreat
US equities continued to slide early Monday with all eyes on this week's annual gathering of central bankers in Jackson Hole, Wyoming where Federal Reserve Chair Jerome Powell is expected to lay out his view on interest rate hikes. About 25 minutes into trading, the Dow Jones Industrial Average was down 1.3 percent at 33,285.62.

The broad-based S&P 500 declined 1.4 percent to 4,168.38, while the tech-rich Nasdaq Composite Index fell 1.6 percent to 12,501.06.

European markets fall
European markets retreated as fears of more aggressive interest rate hikes from the Federal Reserve and the European Central Bank resurfaced.

Shares in European tech companies were underperforming the wider market, with the tech index of shares approaching its August low, down 1.7%. Meanwhile the STOXX 600 fell 0.8%. So far this year, European tech shares are down 24% while the wider index has lost 10.3%.

Tech View: Bearish candle on daily chart
Nifty50 formed a bearish candle on the daily chart. This was after the formation of the Bearish Engulfing pattern on Friday. Analysts said the index has slipped below a falling trend line, indicating a failed breakout. They see further weakness ahead.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of Brightcom, TCI Express, Texmaco Rail, Vardhman Holdings and Global Vectra.
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 signalling weakness ahead
The MACD showed bearish signs on the counters of Tata Steel, YES Bank, IDFC First Bank, Tata Power, ICICI Bank and Coal India. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Adani Ports SEZ (Rs 1,272 crore), ICICI Bank (Rs 1,184 crore), RIL (Rs 1,139 crore), Tata Steel (Rs 791 crore), Asian Paints (Rs 790 crore), and Kotak Bank (Rs 761 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 the highest trading turnovers in the day.

Most active stocks in volume terms
Tata Steel (Shares traded: 7.4 crore), ONGC (Shares traded: 3.1 crore), Tata Motors (Shares traded: 1.5 crore), Adani Ports SEZ (Shares traded: 1.5 crore), ICICI Bank (Shares traded: 1.4 crore) and NTPC (Shares traded: 1.1 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Elgi Equipments, Campus Activewear, Grindwell Norton, ITC, Phoenix Mills, Solar Industries and Torrent Power witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of Metropolis Health, Biocon, Sanofi India and Alembic Pharma were among those that witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured losers as 1,172 stocks ended in the green, while 2,387 names settled with cuts.

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