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

Helped by positive global cues and foreign inflows, the headline indices rose for the fourth consecutive session today. Power, auto and telecom stocks were among the top sectoral gainers while pharma ended in the red.

Here's how analysts read the market pulse:

Prashanth Tapse - Research Analyst, Senior VP (Research), Mehta Equities, said the simple strategy on the benchmark Nifty is to establish long positions and remain a buyer as long as Nifty trades above its biggest interweek support at 16,821 mark.

Deepak Jasani, Head of Retail Research, HDFC Securities, said going by the current momentum, Nifty could test 17,457-17,651 band over the next few days. “A lot of up gaps on the way up also raise the possibility of these gaps being filled after Nifty makes an intermediate top.”

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

US markets

US stock indexes opened lower on Monday following a strong rally last week on earnings optimism, with investors awaiting a factory activity data after similar surveys from China and the Eurozone fueled recession worries.

The Dow Jones Industrial Average fell 89.42 points, or 0.27%, at the open to 32,755.71.

The S&P 500 opened lower by 17.91 points, or 0.43%, at 4,112.38, while the Nasdaq Composite dropped 72.73 points, or 0.59%, to 12,317.96 at the opening bell.


European shares

European equities drifted higher Monday after Asian gains, as investors tracked the latest corporate and geopolitical news.

Markets brushed off weak Chinese data and comments indicating the Federal Reserve is wedded to its anti-inflation rate-hike campaign.

Tech View: Nifty in overbought zone

Nifty50 formed a bullish candle on the daily chart that resembled a Hanging Man candle, suggesting a possible halt to the ongoing positive momentum. The index has also entered the overbought zone, as suggested by the 14-day RSI, but there are no clear signs of weakness as yet.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Nazara Technologies, Venkys, Elgi Equipments, Tata Motors, IDFC and Varun Beverages.

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 United Breweries, Piramal Enterprises, Triveni Engineering, NOCIL, Blue Star and IOC. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

Tata Motors (Rs 2,025 crore), RIL (Rs 1,855 crore), M&M (Rs 1,566 crore), Tata Steel (Rs 1,359 crore), HDFC Bank (Rs 950 crore), and Maruti Suzuki (Rs 907 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: 12.5 crore), Tata Motors (Shares traded: 4.3 crore), ONGC (Shares traded: 2 crore), ITC (Shares traded: 1.6 crore), Hindalco (Shares traded: 1.5 crore) and NTPC (Shares traded: 1.4 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest

Shares of M&M, Maruti Suzuki, ITC, SBI Life and Coal India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Shares of Praxis Home Retail, NAVA Ltd. DRC Systems, DCM Ltd and ARSS Infra witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls

Overall, market breadth favoured winners as 2,277 stocks ended in the green, while 1,193 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)