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

NEW DELHI: Indian equity markets continued to be weighed down by weak global cues. Benchmark indices witnessed heavy sell-off in Friday’s session with Nifty ending lower by 2 per cent at 17,530. Broader markets tumbled even more with Nifty Midcap shedding close to 3 per cent.

Here's how analysts read the market pulse:
S Ranganathan, Head of Research at LKP Securities said, “Indian markets finally chose to mirror global cues after out-performing global peers in the recent past. Weaker domestic flows for last month despite SIPs maintaining their run rate led to profit taking as all sectoral indices ended in the red”.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas is of the view that “ Nifty witnessed sharp swings in both the directions in the week gone by.
On Friday, the Nifty had halted near a short term support of 17,500-17,480. Once that is breached the index can slide down further to 17,200. On the flip side, 17,650-17,680 will act as a near term resistance in the case of any minor degree bounce. From a trading perspective, sell on rise will be the strategy for short term traders”.

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

US market
The US markets on Friday ended in the red, with all the 3 major US indices slipping to levels not seen since mid-July. S&P closed below 3,900, a support level tracked closely. Largely, the warning of an impending global recession by FedEx cautioned investors.

European shares
European indices also ended with a cut of 1.6 per cent on Friday as recession worries loomed. Further, fears of an aggressive rate hike by the US central bank next week weakened investor sentiment. STOXX 600 on the sell-off saw its worst weeks in 3-months, down 2.9 per cent. Sectorally, industrials, financials and healthcare saw the most drag, while real estate stocks were only spared.

Tech View: Bearish candle on daily and weekly charts
The indices established a bearish candle on the daily and weekly charts which suggests bears could remain in control in the coming week. Following weak global cues, Sensex plunged by over 1,000 point s, while Nifty closed below its crucial support at 17,800.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of NHPC, Mcleod Russel, Mishra Dhatu, PVP Ventures and Excel Realty.

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 Power, Bharat Electronics, Bharat Heavy Electricals, NMDC and RBL Bank.

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

Most active stocks in value terms
Infosys (Rs 2,840 crore), RIL (Rs 2,341 crore), Ambuja Cements(Rs 2,271 crore), Adani Enterprises (Rs 2,128 crore), and IndusInd Bank(Rs 1,999 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: 19.65 crore), Vodafone Idea(Shares traded: 19.53 crore), Yes Bank (Shares traded: 12.73 crore), Tata Steel (Shares traded: 10.79 crore) and Suzlon Energy (Shares traded: 7.9 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Karur Vysya Bank, Sumitomo Chemical, Bharat Dynamics, Westlife, Aether Industries etc. witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Voltas, Intellect Design, Medplus Health, Mphasis and Birlasoft witnessed strong selling pressure and hit its new 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured losers as 2,614 stocks ended in the red, while 906 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)