Here’s a look at what some of the key indicators are suggesting for Wednesday's action
Getty ImagesThe index has formed a strong bullish candle on the daily chart amid a healthy advance-to-decline ratio.
NEW DELHI: As Nifty closed above the 11,150 level on Tuesday, it formed a bullish candle on the daily charts, signalling a strong undercurrent. Some analysts, however, said there are signals suggesting that the index may soon see a pause.
Vinod Nair of Geojit Financial Services said although the market uptrend remains intact, investors are advised to stay cautious as the market seems to have come into the overvalued territory.
Ajit Mishra of Religare Broking said Nifty may face the next hurdle at 11,250 level. "The up-move in the banking index is now helping Nifty to sustain at higher levels, while there has been rotational buying elsewhere. Traders should maintain their focus on stock selection and position management,” he said.
Gaurav Ratnaparkhi of Sharekhan by BNP Paribas said Nifty is rallying along with the daily upper Bollinger Band, which itself is in an expansion mode. "On its way up, Nifty is forming runaway gaps on the daily chart. The recent one at 11,113 – 11,037 will act as a near-term support for any minor degree dip. Going ahead, 11,280 will be a key level on the higher side to keep tabs on," he said.
That said here’s a look at what some of the key indicators are suggesting for Wednesday's action: US stocks rise on earnings optimism The S&P 500 and the Dow indexes rose on Tuesday following a slate of positive earnings reports from companies including IBM and Coca-Cola, and on optimism over an eventual vaccine and fiscal stimulus to revive a pandemic-battered economy. The Dow Jones Industrial Average was up 315.72 points, or 1.18%, at 26,996.59 and the S&P 500 was up 21.13 points, or 0.65%, at 3,272.97. The Nasdaq Composite was down 14.20 points, or 0.13%, at 10,752.89.
European stocks hit 4-month highs European shares rallied to four-month highs on Tuesday, with Germany's blue-chip DAX turning positive for the year, after EU leaders agreed on a landmark stimulus package to revive the bloc's economies from a coronavirus-induced slump. The pan-European STOXX 600 jumped 1.1% to its highest level since March 5, while an index of euro zone blue-chip stocks was up 1.7% at its highest since March 3.
Tech View: Nifty may pause soon Nifty50 on Tuesday took its winning streak into a fifth day and in the process breached its immediate resistance at 11,090 level, which was also its 20-month moving average. The index has formed a strong bullish candle on the daily chart amid a healthy advance-to-decline ratio. Analysts, however, felt there are ample signals suggesting that the index is gearing up for a pause.
F&O: Nifty range shifts to 10,800-11,300 India VIX fell 1.14 per cent on Tuesday to 24.42 level. Overall, lower volatility is supporting the bullish stance with a higher market base.
Options data suggested an immediate trading range between 10,800 and 11,300 levels.
Stocks showing bullish bias Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of Indian Oil Corp, ICICI Bank, Ashok Leyland, ONGC, Ambuja Cements, Coal India, ACC, Deepak Fertilisers, Titan Company, Eros International, The Ramco Cements, Kaveri Seed Company, Ramco Industries, Jump Networks, Jyothy Labs and HDFC AMC, among others.
Stocks signalling weakness ahead The MACD showed bearish signs on the counters of Hindalco, IIFL Securities, Sun Pharma, NMDC, Aurobindo Pharma, Ujjivan Small Finance Bank, Hexaware Technologies, Strides Pharma Science, Crompton Greaves, ICICI Securities, Tata Steel, Gufic BioSciences, Thirumalai Chem, SRF, Globus Spirits, Aarti Drugs, Bosch, Hercules Hoists, Nilkamal, Grindwell Norton and Dhunseri Investments. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms Bajaj Finance (Rs 8786.67 crore) , RIL (Rs 3818.10 crore) , HDFC Bank (Rs 2713.68 crore) , BPCL (Rs 2283.40 crore) , Axis Bank (Rs 1917.64 crore) , ICICI Bank (Rs 1708.51 crore) , HDFC (Rs 1286.95 crore) , Bajaj Finserv (Rs 1212.24 crore) , Infosys (Rs 1206.26 crore) and SBI (Rs 1149.64 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.
Most active stocks in volume terms Vodafone Idea (shares traded: 64.42 crore) , Indian Oil Corp (shares traded: 9.39 crore) , Tata Motors (shares traded: 6.60 crore) , SBI (shares traded: 5.93 crore) , BPCL (shares traded: 4.91 crore) , ICICI Bank (shares traded: 4.56 crore) , Uttam Value Steel (shares traded: 4.48 crore) , Axis Bank (shares traded: 4.31 crore) , TV18 Broadcast (shares traded: 3.61 crore) and M&M Finance (shares traded: 3.60 crore) were among the most traded stocks of the session.
Stocks seeing buying interest Hathway Cable, Den Networks, JK Cement, Escorts and Dixon Technologies (India) witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.
Stocks seeing selling pressure Aarti Surfactants, B.C. Power Controls and Mittal Life Style 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 278 stocks on the BSE 500 index settled the day in green, while 218 settled the day in red.
Podcast: How long can the bulls continue this run?>>>
Domestic stocks moved higher for the fifth session in a row, as positive results from early trials of a Covid-19 vaccine candidate, some good Q1 earnings and a EU deal for a massive stimulus plan for the coronavirus-throttled economies buoyed the market. Will the ongoing momentum sustain or will the bulls take a break now? Is the market showing sectoral rotation after the long rally? Does it make sense to stay put or should you take some profits off the table?
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