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

Key equity indices snapped an eight-session winning streak on Friday after scaling record highs during the week on positive global cues and softer crude oil prices. In the last week, Sensex rose 575 points to settle at 62,868, while its broader peer Nifty 50 ended just below the 18,700 level.

Here's how analysts read the market pulse:

“In the near term, the sentiment is likely to remain sideways, with 18,500-18,800 to be the crucial range. A decisive breakout from either band may induce a clean directional move in the market,” Rupak De, Senior Technical Analyst at LKP Securities said.

“The index is trading near the key hourly moving averages as well as near a rising trendline on the hourly chart. 18600 is a key support from where the index can start moving up again. Overall, the short term outlook continues to be positive for a target of 19,000,” Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas said.

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

US market
Wall Street ended mixed on Friday as higher-than-expected job additions in November poured cold water on investor expectations of the Federal Reserve easing its aggressive monetary policy tightening.

The Labor Department's jobs report showed nonfarm payrolls rose by 263,000, compared with an estimated 200,000, as US employers hired more workers than expected in November and raised wages despite mounting worries of a recession. On Friday, Dow Jones Industrial Average rose 34.87 points, or 0.10%, at 34,429.88, while S&P 500 fell 4.87 points, or 0.12%, at 4,071.70, and Nasdaq Composite plunged 20.95 points, or 0.18%, at 11,461.50.

European market
European shares ended lower on Friday after US jobs data came in above expectations, challenging hopes that the US Federal Reserve may start slowing the pace of its interest rate hikes.

The pan-European STOXX closed 0.2% lower on Friday. The index gained 0.6% over the week and registered its longest weekly winning streak since April 2021.

Tech View: Nifty formed a small red candle
As traders booked profits in sync with the global market mood, headline equity index Nifty formed a small red candle for the second consecutive day on the daily chart, indicating the resumption of minor profit booking in the market from all-time highs.

The weekly charts saw the formation of a long positive candle with upper shadow. The chart pattern remained positive with higher tops and bottoms. Analysts said Thursday’s record high of 18,887 could now be considered as a new higher top of the sequence and present weakness is expected to find a higher bottom in the short term.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Paytm, Sequent Scientific, Finolex Industries, Linde India, Zomato and Polycab India 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 IIFL Finance, Central Bank, Crisil, Shriram Transport Finance, SCI and Endurance Technologies, 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
RIL (Rs 1,458 crore), ICICI Bank (Rs 1,323 crore), Bajaj Finance (Rs 961 crore), Maruti Suzuki (Rs 858 crore), TCS (Rs 828 crore), Tata Steel (Rs 787 crore) and HDFC (Rs 724 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: 7.1 crore), ONGC (Shares traded: 2.4 crore), ICICI Bank (Shares traded: 1.4 crore), Power Grid (Shares traded: 97 lakh), ITC (Shares traded: 84 lakh), Tata Motors ( Shares traded: 84 lakh) and Axis Bank (Shares traded: 80 lakh) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Raymond, BHEL, JK Lakshmi Cement, APL Apollo Tube, Jyothy Labs, Ceat and Varun Beverages witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
No shares hit their 52-week lows on Friday, which signals bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 1,948 stocks ended in the green, while 1,544 names settled with cuts.

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