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

NEW DELHI: Nifty50 entered the Blue Sky territory on Tuesday as it took out the crucial 17,100 level. Analysts said though the momentum looks very strong, the index may pause around 17,200 levels.

Here's how analysts read the market pulse:

Mazhar Mohammad of Chartviewindia.in said, the index is in blue sky territory, but there seems to be potential resistance around the 17,150 level. "In case the bulls manage to get past this initial hurdle, they can extend the rally towards the 17,350 level," he said.

Palak Kothari of Choice Broking said the index has given a breakout of the rising trendline and is trading above the upper band of the Bollinger formation, suggesting bullish sentiment. Nifty50's immediate support has shifted to the 17,000 level while resistance is seen at the 17,200 level," he said.

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

S&P 500, Nasdaq set for monthly gains
The S&P 500 and the Nasdaq slipped on Tuesday, led by heavyweight technology shares, but were still on course to notch another month of gains following the Federal Reserve's dovish stance on its massive asset purchases. At 10:17 a.m. ET, the Dow Jones Industrial Average was up 13.74 points, or 0.04 per cent, at 35,413.58, the S&P 500 was down 4.53 points, or 0.10 per cent, at 4,524.26, and the Nasdaq Composite was down 56.68 points, or 0.37 per cent, at 15,209.21, on pace to end higher for the third straight month.

European shares end lower
Pan-European STOXX 600 index ended lower for the day but clocked a seventh consecutive monthly gain. London's FTSE 100 ended lower on Tuesday, mainly due to weakness in financials and commodity-linked stocks, although the blue-chip index posted its best month since April.

Tech View: Nifty50 in Blue Sky territory
Nifty50 on Tuesday took out the 17,100 level in style, as the bulls dominated the scene for the second straight session after hinting at a breakout in the previous session. Analysts said there are no signs of weakness and momentum on the index looks pretty strong, but feel the index could take some breather near the 17,200 level after seven days of relentless buying.

F&O: VIX spikes as Call writers get trapped
India VIX moved up 9.01 per cent from 13.31 to 14.52 levels. Volatility spiked as Call writers got trapped and Nifty moved up sharply to surpass a key Call writing strike of 17,000. VIX needs to cool down to get more buying interest in the broader market. Options data suggests a broader trading range between 16,500 and 17,500 zones while an immediate trading range in between 16,850 and 17,300 zones.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Canara Bank, Hindalco, ICICI Bank, Tata Coffee, Subex, Bandhan Bank, Ambuja Cements, NLC India, Marico, REC, TVS Motor, Zee Entertainment, Aurobindo Pharma, UCO Bank, L&T, Parag Milk Foods, Eicher Motors, Titan Company, Aditya Birla Fashion, Voltas, Divi's Lab, Hero MotoCorp, BSE, DB Corp, MCX, UltraTech Cement, Sobha, ICICI Securities, Dixon Technologies, Tourism Finance, Persistent Systems, Aarti Drugs, Natco Pharma, Sasken Technologies, Sheela Foam, 3M India, Asian Hotels (North), Lumax and Bharat Rasayan.

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 R Systems International, Hexa Tradex, The Investment Trust and Honda India Power. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Bharti Airtel (Rs 3860.96 crore), Tata Steel (Rs 3587.17 crore), RIL (Rs 2759.50 crore), Bajaj Finance (Rs 2171.25 crore), Infosys (Rs 2084.29 crore), Au Small Fin Bank (Rs 1497.64 crore), Apollo Hospital (Rs 1431.41 crore), ICICI Bank (Rs 1417.48 crore), HDFC (Rs 1376.16 crore) and TCS (Rs 1207.11 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.

Most active stocks in volume terms
Vodafone Idea (Shares traded: 29.89 crore), YES Bank (Shares traded: 8.98 crore), Bharti Airtel (Shares traded: 5.96 crore), National Aluminium (Shares traded: 5.94 crore), PNB (Shares traded: 5.66 crore), IDFC First Bank (Shares traded: 4.14 crore), Tata Motors (Shares traded: 3.69 crore), Canara Bank (Shares traded: 3.26 crore), Power Grid (Shares traded: 3.24 crore) and SAIL (Shares traded: 3.19 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Bharti Airtel, Max Healthcare, CAMS, Indian Energy Exchange and HLE Glasscoat witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Nakoda Group of Industries witnessed strong selling pressure and hit a 52-week low, signalling bearish sentiment on the counter.

Sentiment meter favours bulls
Overall, the market breadth remained in favour of the bulls. As many as 313 stocks on the BSE500 index settled the day in the green, while 184 settled the day in the red.

Podcast: How should investors position themselves?

BSE Sensex swung in a range of 760 points and scaled the 57,000 mark for the first time. It settled just above 57,550, 663 points higher. The NSE barometer hit the 17,000 level for the first time. Nifty50 soared over 200 points to settle above 17,132. The markets scaled new highs during today's session. Does this rally have more legs? How should investors position themselves at the current highs?