Ahead of Market: 10 things that will decide D-Street action on Monday

Headline equity index Nifty appeared to be directionless on Friday as well as on the weekly charts. The broader market, however, has been outperforming and is likely to remain in flavour with action in niche midcap sectors, experts say

Here's how analysts read the market pulse:

Rupak De, Senior Technical Analyst at LKP Securities, said the trend remains positive as the index closed above the short-term support of 17,400. “The daily RSI is in a bearish crossover. A decisive move above 17,700 may induce a rally in the market,” he said.

Prashanth Tapse - Research Analyst, Senior VP (Research), Mehta Equities, said Nifty’s biggest hurdle was seen at 17,777. “Above the same, all bullish eyes will be on Nifty’s psychological 18,000 mark. On the other hand, Nifty’s line on the sand is at the 17,371 mark.”

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

Wall Street ends week on down note
US stocks closed out the trading week on a down note on Friday, as early gains from a jobs report that showed a labor market that may be starting to loosen gave way to worries about the European gas crisis. The Dow Jones Industrial Average fell 337.98 points, or 1.07%, to 31,318.44; the S&P 500 lost 42.59 points, or 1.07%, to 3,924.26; and the Nasdaq Composite dropped 154.26 points, or 1.31%, to 11,630.86.

Markets are closed on Monday for the Labor Day holiday.

European markets close higher
European stocks reclaimed some lost ground on Friday following a brutal week underlined by mounting concerns over energy crisis, red-hot inflation data and sharply higher bets of an aggressive rate hike by the European Central Bank due next week.

The pan-European STOXX 600 rose 0.7%, snapping five sessions of losses, although the index was set for a weekly loss of nearly 4% - its third straight weekly decline.

Tech View: Consolidation on cards
Nifty50 on Friday formed a double Inside Bar pattern on the daily scale, reflecting indecision. On the weekly scale, the index formed a bullish candle with an upper wick, reflecting selling at highs.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of EIH, TCNS Clothing, Sheela Foam, Trident, Mahindra Holiday and Vijaya Diagnostic.

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 Campus Activewear, Jyothy Labs, Phoenix Mills, ICICI Pru Life, REC and Adani Green.

A 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 1,528 crore), Bajaj Finserv (Rs 1,211 crore), HDFC Bank (Rs 889 crore), HDFC (Rs 887 crore), ITC (Rs 827 crore), and Infosys (Rs 754 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 the highest trading turnovers in the day.

Most active stocks in volume terms
Tata Steel (Shares traded: 4.6 crore), ITC (Shares traded: 2.6 crore), NTPC (Shares traded: 2.5 crore), ONGC (Shares traded: 1.7 crore), Tata Motors (Shares traded: 1.1 crore) and Hindalco (Shares traded: 1.1 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of EIH, GMM Pfaudler, Elgi Equipments, Mahindra Holiday, Timken India, Adani Enterprises and NHPC witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of Biocon, Natco Pharma and Sanofi India were among those that witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured losers as 1,715 stocks ended in the green, while 1,723 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)