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

NEW DELHI: Domestic equity markets kicked off the new month on a muted note on Monday, but scripted a quick recovery from the day's lows, despite weakness in global peers, suggesting that the bulls were in no mood to surrender easily. Amid high volatility, benchmark indices settled flat. On Tuesday, the market remained closed.

Here's how analysts read the market pulse:

Nifty50 is currently placed at the valuation support and also at the 200-day EMA around 16,900 levels, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

Mazhar Mohammad of Chartviewindia.in said as the index bounced back smartly on a couple of occasions from sub-16,900 levels a close below it can significantly weaken the trend, with a near term target of 16,400 levels.

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

US stocks open mixed
US stock indexes were mixed at the open on Tuesday after a slew of underwhelming earnings reports, while investors braced for a big interest rate hike by the Federal Reserve this week to tame surging prices.

The Dow Jones Industrial Average rose 24.59 points, or 0.07 per cent, at the open to 33,086.09. The S&P 500 opened higher by 4.40 points, or 0.11 per cent, at 4,159.78, while the Nasdaq Composite dropped 24.56 points, or 0.20 per cent, to 12,511.46 at the opening bell.

European shares trade higher
European stocks rose on Tuesday after a string of upbeat earnings, while banking shares gained as government bond yields hit fresh highs in anticipation of quicker interest rate hikes by global central banks to tackle surging inflation. The pan-European STOXX 600 index climbed 0.6 per cent, rebounding from a "flash crash" in the previous session caused by a single sell order trade by Citigroup Inc.

Tech View: Bullish candle formed
Nifty50 on Monday saw a gap-down start but recouped most losses by the end of the session, forming a bullish candle on the daily chart. While the momentum turned positive, the broader range of 17,300-16,800 stayed intact and analysts believe only a break of this range on either side would lead to a decisive move.

F&O: Support at 16,700
Immediate support and resistance for Nifty are at 16,700 and 17,200, respectively. Immediate support and resistance for Bank Nifty are at 35,500 and 36,500 respectively.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Tata Motors, Gokaldas Exports, TARC, Burnpur Cement, Greenpanel Industries, MCX, Asahi India Glass and Rossari Biotech.

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 Zee Media, IL&FS Engineering, NHPC, Bandhan Bank, Texmaco Rail, Hathway Cable and Adani Enterprises. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
HDFC Bank (Rs 1,355.25 crore crore), Reliance Industries (Rs 1,216.03 crore), Axis Bank (Rs 1,175.20 crore), Wipro (Rs 1,091.78 crore), Infosys (Rs 1,087.93 crore), IndusInd Bank (Rs 906.13 crore) and SBI (Rs 906.01 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
ONGC (Shares traded: 2.35 crore), Wipro (Shares traded: 2.19 crore), Coal India (Shares traded: 2.12 crore), ITC (Shares traded: 1.9 crore), Tata Motors (Shares traded: 1.89 crore), SBI (Shares traded: 1.85 crore) and Axis Bank (Shares Traded: 1.61 crore) were among the most traded stocks in Monday's session on NSE.

Stocks showing buying interest
NLC India, MRPL, Amber Enterprises, Indian Hotels, Gujarat Alkalies and Crisil witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Solara Active Pharma, Thyrocare Technologies, Rallis India, Zomato, RBL Bank and Sanofi India 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 1,200 stocks ended in the green, while 2,266 names settled with cuts.

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