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

NEW DELHI: Nifty50 on Tuesday fell for the third straight session and formed a bearish candle on the daily chart. Analysts said a fall below the crucial support of 15,630-15,600 can open up the doors for the index to hit the 15,450 level. The markets were closed on Wednesday on account of Bakri-Id.

Here's how analysts read the market pulse:-
Gaurav Ratnaparkhi of Sharekhan said the daily momentum indicator has turned bearish, indicating that the Nifty is under pressure and is likely to trade sideways in the short term. "On the downside, the June low of 15,450 will act as the subsequent support. Thus, the short-term range for Nifty will be 15450-15900," he said.

Independent analyst Manish Shah said the index hit the rising 50-period moving average during the day and reversed. "We may see one more day of a decline after which Nifty50 should head back towards the 15,900-15,950 range in the next 3-4 trading days," he said.

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

US shares post second straight daily gain
Wall Street stocks posted their second straight daily gain on Wednesday, with robust corporate earnings and renewed optimism about the U.S. economic recovery fueling a risk-on rally. The Dow Jones Industrial Average rose 286.01 points, or 0.83%, to 34,798, the S&P 500 gained 35.63 points, or 0.82%, to 4,358.69 and the Nasdaq Composite added 133.08 points, or 0.92%, to 14,631.95. Of the 11 major sectors in the S&P 500, energy stocks were the big winners, jumping 3.5% with the help of surging crude prices.

Blue-chip earnings lift European shares
A slew of upbeat updates from European blue-chip firms helped the region's benchmark index rise on Wednesday and further recover from Monday's sharp losses, while travel stocks roared back after weeks of declines. At 8:00 p.m. IST, the pan-European STOXX 600 index was up 1.64%, extending Tuesday's small gains. Travel and leisure stocks jumped 4.2% after getting hammered recently by worries about a resurgence in virus cases.

Tech View: Nifty respects key support
Nifty50 on Tuesday fell for the third straight session but somehow managed to close above the immediate support range of 15,630-15,600. Analysts said a fall below this range can open up the doors for the index to hit the 15,450 level. They see the immediate hurdle for Nifty50 at 15,730. "The force with which the market is falling in the last three sessions might have altered the medium-term trend, which will be confirmed if Nifty50 closes below the 15,450 level. If the bulls manage to defend the 15,600 level on Thursday, some stability may emerge. The index's initial hurdle can be around 15,728 levels," said Mazhar Mohammad of Chartviewindia.in.

F&O: VIX climbs above 13 level
India VIX moved up 4.14 per cent from 12.68 to 13.20 level. A spike in volatility is seen due to a profit-booking decline in the market, but an overall lower VIX can again attract some buying interest on declines near key support zones. On the options front, maximum Put Open Interest was seen at 15,000 level followed by 15,500, while maximum Call OI stood at 16,000 level followed by 15,800. There was Call writing at 15,700 and then 15,800 while Put writing was seen at 15,600 and then 15,200 levels. Options data suggested a broader trading range between 15,500 and 15,800 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Asian Paints, Precision Camshafts, Elgi Rubber, Windsor Machines, Suven Pharmaceutical, Caplin Point Lab, Ingersoll Rand, Somany Ceramics, Tube Investments, Nestle India, Foseco India, VST Tillers and NBI Industrial Finance.

The MACD is known for signalling 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 Subex, Trident, ICICI Bank, NTPC, Vedanta, Axis Bank, NCC, IRB Infrastructure, UPL, PC Jeweller, Jindal Saw, Ansal Housing, Bharat Forge, Redington (India), InterGlobe Aviation, Sun Pharma Advanced, Deepak Nitrite, SBI Life Insurance, Jyothy Labs, DB Corp, MSTC and Nalwa Sons Investment. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Tuesday's most active stocks in value terms
Asian Paints (Rs 2,087.98 crore), ACC (Rs 1,965.59 crore), HDFC Bank (Rs 1,744.60 crore), Clean Science & Technology (Rs 1,184.38 crore), Tata Steel (Rs 1,065.42 crore), HCL Tech (Rs 999.85 crore), BSE (Rs 894.78 crore), ICICI Bank (Rs 848.16 crore), Tata Motors (Rs 842.15 crore) and Bajaj Finance (Rs 835.40 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.

Tuesday's most active stocks in volume terms
Vodafone Idea (Shares traded: 24.79 crore), YES Bank (Shares traded: 13.39 crore), Reliance Communication (Shares traded: 5.95 crore), JP Power (Shares traded: 5.81 crore), Tata Power (Shares traded: 4.88 crore), PNB (Shares traded: 4.88 crore), Indiabulls Real Estate (Shares traded: 4.64 crore), SAIL (Shares traded: 4.63 crore), BHEL (Shares traded: 3.91 crore) and Orient Green Power (Shares traded: 3.75 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Sona BLW Precision Forgings, ACC, JK Lakshmi Cement, Asian Paints and Birla Corp witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday, signalling bullish sentiment.

Stocks seeing selling pressure
Akg Exim and GFL witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bears
Overall, the market breadth remained in favour of the bears. As many as 81 stocks on the BSE500 index settled the day in the green, while 417 settled the day in the red.

Podcast: Which pockets of the market are looking attractive right now? >>>

Market has fallen nearly 1,000 points in the last few sessions. In such a scenario, which pockets should investors explore for investing? Will bank stocks continue to witness weakness? What are the Nifty tech charts suggesting?