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

NEW DELHI: Market continued to remain subdued amid hawkish commentary from the US Federal Reserve and crucial geopolitical situation in Europe. Analysts advise to avoid trading and buy on dips.

Here's how analysts read the market pulse:-

Gaurav Ratnaparkhi of Sharekhan said the moving averages have been acting as a key barrier so far this month. "The index is consolidating and this consolidation can continue further, before Nifty50 prepares to breakout on the upside. On the higher side, 17,500 is a key hurdle to watch out for," Ratnaparkhi said.

"Looking at the technical setup, the market is likely to trade in a consolidated manner, until a breakout on either side is seen decisively. We reiterate that the indices may not be doing much, the individual stocks are not at all short of action. Hence one should continue to identify such potential movers and trade accordingly," said Osho Krishan, Sr. Analyst - Technical & Derivative Research at Angel One.

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

Wall Street's main indices open lower:
Tensions between the West and Russia surrounding Ukraine unnerved investors, with some disappointing earnings also weighing on the mood. The Dow Jones Industrial Average fell 75.80 points, or 0.22%, at the open to 34,858.47. The S&P 500 opened lower by 18.95 points, or 0.42%, at 4,456.06, while the Nasdaq Composite dropped 119.90 points, or 0.85%, to 14,004.19 at the opening bell.

European market positive:
European stocks initially held up fairly well thanks to a slew of good earnings results.

European aircraft giant Airbus posted record profits in 2021 after two years of losses as it cruises past the pandemic-induced crisis in the travel industry, company results showed Thursday.

Air France-KLM posted another net loss in 2021, though it cut the losses in half, at 3.3 billion euros, compared to 2020.

Tech View: Bearish candle
Nifty50 on Thursday fell for the second day in a row and formed a bearish candle on the daily chart, as it continued to face selling pressure near its 20-day and 50-day moving averages. The ongoing consolidation may continue for some more time, before Nifty50 sees a breakout, analysts said.

F&O: Volatility to continue
Today, the Index saw rangebound swings as selling got instensified in final hour and option writers were active at both ends. In the options segment, 17,000 put option added decent open interest as the market rallied which would be the immediate support for this expiry, while 17,500-17,700 would be the levels to watch on the higher side,” said Ruchit Jain, 5paisa.com.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Lemon Tree Hotels, Shriram Transport Finance, Shriram City Union, Mahindra Holiday, Tata Consumer and Solar Industries.

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 Hindalco Industries, Gland Pharma, TV18 Broadcast, Sun TV, LIC Housing and Nalco. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Reliance Industries (Rs 1,447 crore), Tata Motors (Rs 1,411 crore), HDFC (Rs 1,279 crore), ICICI Bank (Rs 1,260 crore), TCS (Rs 1,190 crore), SBI (Rs 845 crore) and Inosys (Rs 682 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: 13 crore), YES Bank (Shares traded: 9 crore), BHEL (Shares traded: 5 crore), Suzlon Energy (Shares traded: 4 crore), PNB (Shares traded: 4 crore) and Bank of Baroda (Shares traded: 3 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Adani Green, Orient Refractories, Adani Gas, JSW Energy, Gujarat Fluorochem, Blue Star and Trident witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Indigo Paints, P&G Health, Alembic Pharma, Manappuram Finance, Jubilant Life Science, Engineers India and HUDCO witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counter.

Sentiment meter favours bears
Overall, market breadth was in favour of losers as 1,303 stocks ended in the green, while 2,069 names settled with cuts.

Market Watch: How to ride current market volatility & which sectors to avoid

Domestic equity market extended its losing streak to a straight second session as Dalal Street witnessed another volatile session which ended with cuts. The benchmark indices dropped sharply lower in the second half as the tensions between Ukraine and Russia intensified. Hawkish tone of the Federal Reserve also hurt the sentiments, which may add to the FII outflows.