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

NEW DELHI: Nifty saw a gap-up opening on Tuesday and traded on a steady note in the intraday session, forming a long bullish candle on the daily chart.

Mazhar Mohammad of Chartviewindia.in believes that as long as Nifty50 sustains above 14,484 level, it can slowly head to test its 50-day simple moving average, whose value is placed around 14,800 level. While there is a bearish gap zone in the 14,652-14,785 range that was registered on April 12, Mohammad said the level cannot be ruled out in the next two trading sessions, given the monthly expiry.

“Stocks are up in anticipation of good quarterly earnings and improved outlook. Mid- and smallcaps are outperforming the main benchmark. This is even as FIIs continue to be net sellers in the domestic market due to weak Asian markets ahead of the Fed meeting. However, the same has been more than compensated by DIIs and retail investors," said Vinod Nair, Head of Research at Geojit Financial Services.

That said, here’s a look at what some of the key indicators are suggesting for Wednesday's action:
US stocks edge lower as Tesla, 3M weigh
Lackluster results from Tesla and 3M dragged Wall Street's main indexes lower on Tuesday, shifting investor focus to earnings from big technology companies, including Microsoft and Alphabet, later in the day. The Dow Jones Industrial Average was down 23.15 points, or 0.07%, at 33,958.42, the S&P 500 was down 5.87 points, or 0.14%, at 4,181.75 and the Nasdaq Composite was down 50.07 points, or 0.35%, at 14,088.70.

European shares flat as UBS unveils Archegos hit
European stocks were largely flat on Tuesday following earnings from blue-chip companies such as HSBC and BP, while UBS became the latest bank to disclose a hit from dealing with US investment firm Archegos. The pan-European STOXX 600 index slipped 0.18%, with a record high for travel & leisure stocks and gains in energy shares offsetting losses in automakers.

Tech View: Nifty takes out 20-EMA
Nifty50 on Tuesday breached its 20-day exponential moving average (EMA) on a closing basis. This was the third straight session when the index made a higher high-low formation. On the day scale, the index formed a bullish candle after forming two indecisive charts. Analysts said the daily momentum indicators have turned in favour of the bulls. They believe Nifty may test the 14,750 level in the coming days. During the session, Nifty saw a fresh bout of buying interest near the key hourly moving averages.

Check out the candlestick formations in the latest trading sessions

ETMarkets.com

F&O: Rising VIX points to bullish momentum
India VIX fell 1.78% from 23.49 to 23.08 level. The fear gauge needs to hold below the 20 mark to again attract a bullish stance in the market. On the options front, maximum Put Open Interest was seen at 14,000 level followed by 14,500 while maximum Call OI stood at 15,000 level followed by 14,800. Call writing was seen at strike prices 14,850 and 14,900 while there was Put writing at 14,500 and 14,600 levels. Options data suggested a wider trading range between 14,400 and 14,880 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of Vodafone Idea, SBI, Tata Motors, Tata Steel, Federal Bank, Vedanta, NMDC Ltd, Reliance Industries, IndusInd Bank, L&T, Spicejet, Indian Bank, Bajaj Finance, LIC Housing Finance, Bharat Forge, InterGlobe Aviation and Karnataka Bank.

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 Bajaj Consumer Care, Prince Pipes & Fittings, Sobha, Neuland Laboratories, Cigniti Technologies, Timken India and Tree House Education. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Tuesday's most active stocks
Axis Bank (Rs 3225.81 crore), Tata Steel (Rs 2404.33 crore), RIL (Rs 1825.60 crore), SBI (Rs 1607.44 crore), Adani Ports & SEZ (Rs 1538.19 crore), Hindalco (Rs 1506.44 crore), HDFC Bank (Rs 1472.80 crore), ICICI Bank (Rs 1448.61 crore), Bajaj Finance (Rs 1274.40 crore) and Maruti Suzuki (Rs 1066.33 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.

Tuesday's most active stocks in volume terms
YES Bank (Shares traded: 12.75 crore), Vodafone Idea (Shares traded: 10.75 crore), PNB (Shares traded: 9.72 crore), SAIL (Shares traded: 6.00 crore), NALCO (Shares traded: 5.79 crore), BHEL (Shares traded: 5.21 crore), Alok Industries (Shares traded: 4.71 crore), Axis Bank (Shares traded: 4.66 crore), SBI (Shares traded: 4.60 crore) and Bank of Baroda (Shares traded: 4.55 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Alkyl Amines, Balaji Amines, GNFC, Gujarat Fluorochem and Deepak Nitrite 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, Deep Industries, Infibeam Avenues and Suvidhaa Infoserve witnessed strong selling pressure in Tuesday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 376 stocks on the BSE 500 index settled the day in green, while 119 settled the day in red.

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Benchmark indices recorded over 1 per cent gain for the second straight session on Tuesday, ahead of Thursday's monthly futures & options expiry. A fall in daily Covid cases and an appreciation in rupee for the second day eased fears of foreign outflows. Sensex rose 558 points and closed near the 49,000 mark. Nifty advanced 1.16 per cent and settled above 14,650. We spoke to Ajit Mishra of Religare Securities to share his views on the market.