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

NEW DELHI: Nifty50 on Wednesday formed an indecisive candle resembling the 'Hanging Man' on the daily chart. Analysts said the index may witness some consolidation in the coming days.

Here's how analysts read the market pulse:

Mazhar Mohammad of Chartviewindia.in said the near-term trend may remain directionless, as Nifty50 appears to be in a new trading range between 16,350-16,160. "The advance-decline ratio has decisively favoured the bears, hinting at a distribution phase that will typically be followed by a breakdown," he said.

Gaurav Ratnaparkhi of Sharekhan said the market will stay in the consolidation phase briefly. "The current sideways action is expected to be followed by the next leg up, which will take Nifty to 16,400 level in the short term," he said.

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

Wall Street climbs on slowing inflation
The S&P 500 and the Dow Jones Industrial Average hit record highs on Wednesday after data showed that growth in inflation appeared to have peaked, while economically sensitive stocks gained on the passing of a large infrastructure bill. At 10:07 a.m. ET, the Dow Jones Industrial Average was up 173.06 points, or 0.49 per cent, at 35,437.73, the S&P 500 was up 10.05 points, or 0.23 per cent, at 4,446.80, and the Nasdaq Composite was up 12.95 points, or 0.09 per cent, at 14,801.04.

European shares at record highs
European shares hit record highs, clocking their longest winning streak in two months on Wednesday on optimism about an upbeat earnings season, while a slowing increase in U.S. inflation calmed nerves around monetary policy tapering. The STOXX 600 index rose 0.4 per cent to hit an all-time high for an eighth consecutive session.

Tech View: Nifty likely to see some consolidation
Nifty50 on Wednesday formed an indecisive candle on the daily chart. The 50-pack index has been failing to take out the 16,300 level on a closing basis, even as strong buying is being observed on every fall below the 16,200 level. At Wednesday's low of 16,162, the index slipped into the bullish gap zone at 16,176-146 level registered on August 4, before staging a recovery. Analysts believe the NSE barometer is in for some more consolidation.

F&O: Lower VIX indicates bulls holding the fort
India VIX moved up marginally by 0.10 per cent from 12.70 to 12.71 level. The overall lower volatility indicates that the bulls are holding the command and declines are being bought into. Options data suggested a broader trading range between 16,000 and 16,500 levels while the immediate trading range was seen between 16,150 and 16,400 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Indian Oil Corp, Reliance Industries, Gufic BioSciences, Agro Phos India, Albert David, Suumaya Industries and Rajdarshan Industries.

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 Trident, Hindalco Industries, Wipro, Power Finance, Usha Martin, JK Paper, Trent, JK Tyre, Fineotex Chemical, Shriram EPC, Orient Cement, Ester India, Graphite India, GHCL, Goodluck India, Shanthi Gears, Jubilant Foodworks, Emami, Advani Hotels, Tilaknagar Industries, Mangalam Cement, KIOCL, Heidelberg Cement, SPL Industries, Quess Corp, STL Global, Emami Paper Mill, Avenue Supermarts, HEG, Mahindra Logistics, STEL Holdings, LGB Forge, Balaji Amines, Fine Organic Industries, Securekloud Tech, Steel Strips Wheels, TPL Plastech, HIL, Zydus Wellness, Nilkamal, Shriram City Union, SKF India, Summit Securities, Asian Hotels (West) and Lakshmi Finance. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Tata Steel (Rs 2046.80 crore), Zomato (Rs 1469.67 crore), Bharti Airtel (Rs 1141.21 crore), SAIL (Rs 1097.44 crore), SBI (Rs 1019.24 crore), Vedanta (Rs 989.73 crore), Siemens (Rs 954.90 crore), HDFC Bank (Rs 944.85 crore), RIL (Rs 891.68 crore) and Manappuram Finance (Rs 884.96 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 the highest trading turnovers in the day.

Most active stocks in volume terms
Vodafone Idea (Shares traded: 28.08 crore), YES Bank (Shares traded: 12.07 crore), Zomato (Shares traded: 11.17 crore), SAIL (Shares traded: 8.34 crore), PNB (Shares traded: 6.06 crore), IDFC First Bank (Shares traded: 5.56 crore), NALCO (Shares traded: 5.34 crore), Manappuram Finance (Shares traded: 5.18 crore), Suzlon Energy (Shares traded: 4.18 crore) and Bank of Baroda (Shares traded: 4.10 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Hikal, Jubilant Ingrevia, Vedanta, Siemens and Hinduja Global witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
YES Bank, Alembic Pharma and Jubilant Life witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bears
Overall, the market breadth remained in favour of the bears. As many as 163 stocks on the BSE500 index settled the day in green, while 332 settled the day in the red.

Podcast: What is spooking midcap and smallcap stocks?

BSE's circular on additional price surveillance measures spooked broader market investors. Why exactly are midcap and smallcap investors worried? Will 16,300 act as a stiff resistance for Nifty? What are the technical charts suggesting?