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

Benchmark equity Indices broke a 3-day losing streak and closed in the green on Tuesday led by the index heavyweight Reliance, banking, consumer and IT stocks. The BSE Sensex ended 274 points higher to end at 61,419 while its broader peer Nifty 50 ended just below the 18,250 level.

Here's how analysts read the market pulse:

“Nifty started flat following global peers and moved up higher by the end of the session. On the higher end, it moved back above 18,200. A bullish harami pattern on the daily chart suggests a recovery in the term. The trend looks sideways to positive. Going forward, 18,200 may provide immediate support below which the index may drift down towards 18,100. On the higher end, resistance is visible at 18,300/18,450,” Rupak De, Senior Technical Analyst at LKP Securities, said.

“The short-term trend of Nifty seems to have turned down and the market is now approaching a crucial support zone of around 18,100-18,000 levels, which is expected to be a make or break for the market ahead. Failure to show any sustainable upside bounce from near the said support is likely to open sharp weakness for the market ahead,” Nagaraj Shetti, Technical Research Analyst at HDFC Securities, said.

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

US market
Wall Street's main indexes rose on Tuesday as gains in Walgreens and Best Buy helped investors assuage worries around the economic fallout of stricter COVID-19 curbs in China.

Dow component Walgreens Boots Alliance Inc rose 1.9% after Cowen & Co upgraded the drug distributor stock, citing its healthcare services business push.

Best Buy Co Inc soared 9.4%, rising the most among S&P 500 components after forecasting a smaller-than-expected drop in annual sales.

At 10:07 am ET, the Dow Jones Industrial Average was up 267.99 points, or 0.80%, at 33,968.27, the S&P 500 was up 19.71 points, or 0.50%, at 3,969.65, and the Nasdaq Composite was up 1.11 points, or 0.01%, at 11,025.62.

Energy led gains among the 11 major S&P 500 sector indexes, bouncing off four-week lows by adding 2%.

European shares
European shares rose on Tuesday, supported by a recovery in oil stocks after a rout in the previous session as investors weighed mixed signals from central bank policymakers on the path of interest rate hikes.

The pan-European STOXX 600 index rose 0.4% to hover near its strongest levels in over two months.

Oil and gas stocks climbed 3.6%, set to recoup Monday's losses, as crude prices rose after Saudi Arabia's energy minister denied a report that suggested the OPEC+ group was considering an increase in supply.

Miners gained 2.0% after dropping 1.6% in the previous session due to worries about surging COVID-19 cases in China.

Tech View: Inside Bar and a Bullish candle
Indicating support based buying, headline equity index Nifty formed an Inside Bar and a Bullish candle on daily frame with long lower shadow. Now, it has to hold above 18,200 zones, for an up move towards 18,350 then 18,442 zones whereas supports are placed at 18,088 and 17,950 zones, said Chandan Taparia of Motilal Oswal.

India VIX was down by 6.47% from 14.79 to 13.84 levels. Volatility has been cooling off from the last eight weeks and gave its lowest closing of the last 294 sessions.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Blue Dart, APL Apollo Tube, NMDC, SBI Card, Orient Refractories and ICICI Bank, 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 Easy Trip Planners, Mazagon Dock Shipbuilders, Cochin Shipyard, Varun Beverages, Rain Industries and Wockhardt among others.

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

Most active stocks in value terms
ICICI Bank (Rs 1,040 crore), RIL (Rs 780 crore), Adani Enterprises (Rs 687.41 crore), HDFC Bank (Rs 682 crore), Bharti Airtel (Rs 647 crore), Bajaj Finance (Rs 642 crore) and Infosys (Rs 536 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
Tata Steel (Shares traded: 2.8 crore), NTPC (Shares traded: 1.2 crore), ICICI Bank (Shares traded: 1.1 crore), ONGC (Shares traded: 1.1 crore), SBI (Shares traded: 80 lakh), Bharti Airtel (Shares traded: 76 lakh) and ITC (Shares traded: 65 lakh) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Easy Trip Planners, Bank Of India, Castrol India, Indian Railway Finance, HAL, IIFL Finance and Kalpataru Power witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of PayTM, Avanti Feeds, Olectra Greentech, Shilpa Medicare, Max Financial, Thyrocare Technologies and Indigo Paints witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured bears as 1,809 stocks ended in the red, while 1,636 names settled with gains.

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