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

NEW DELHI: Nifty50 on Friday gained for the fifth straight session, but formed a 'Hanging Man' candle on both daily and weekly charts. Analysts said a minor dip cannot be ruled out in the coming days.

Here's how analysts read the market pulse:-
Mazhar Mohammad of Chartviewindia.in said formations such as Hanging Man are usually visible around short-term turning points. "In case the 16,565 level is breached on a closing basis, a retest of the recent low of 16,376 can’t be ruled out," he said.

Shrikant Chouhan of Kotak Securities said if the index stays above 16,650, the uptrend may continue up to the 16,825-16,950 levels. "A fall below this level may trigger temporary weakness till 16,375-16,300 levels," he said.

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

US shares nab all-time closing highs
Wall Street rallied on Friday, pushing the S&P and the Nasdaq to record closing highs for the fourth time this week, as US Federal Reserve Chairman Jerome Powell's remarks at the Jackson Hole Symposium calmed fears over the tapering timetable and sent investors into the weekend in a buying mood. The Dow Jones Industrial Average rose 242.68 points, or 0.69%, to 35,455.8, the S&P 500 gained 39.37 points, or 0.88%, to 4,509.37 and the Nasdaq Composite added 183.69 points, or 1.23%, to 15,129.50.

European shares end higher on dovish Fed
European stocks rose on Friday after Federal Reserve Chair Jerome Powell showed no signs the US central bank will reduce a massive stimulus program, while real estate stocks were led higher by Norway's Entra after a major peer took a stake in the firm. The pan-European STOXX 600 index closed 0.4% higher, with mining stocks up 1.9%, while real estate stocks added 1.5%.

Tech View: Analysts see market fall ahead
Nifty50 on Friday climbed for the fifth straight session. In the process, it topped the 16,700 mark, but formed a 'Hanging Man' candle on both daily and weekly charts. Analysts said the prevailing charts do not instill confidence, even though this was the fourth week in a row when the index made a higher high-low formation. A minor dip cannot be ruled out, analysts said.

F&O: Low volatility helping buy on dips
India VIX fell 1 per cent from 13.54 to 13.40 level. A cooldown in volatility from the recent swing high has given a 'buy on decline' stance to the market and now VIX needs to hold below 12 level to get more buying interest in the broader market. Options data suggested a broader trading range between 16,000 and 17,000 levels while an immediate trading range in between 16,500 and 17,000 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Gayatri Projects, Sudarshan Chemicals, Gujarat Mineral Dev, Alok Industries, Shree Renuka Sugars, NBCC (India), HFCL, Central Bank of India, City Union Bank, HUDCO, SBI Life Insurance, DCW, Bank of India, Engineers India, Delta Corp, NRB Bearings, GSS Infotech, PTC India, Just Dial, Dr. Reddy's Labs, Colgate Palmolive, JK Lakshmi Cement, Jubilant Pharmova, SREI Infrastructure, Welspun Enterprises, Oracle Financial Services, SIS, Sirca Paints India, GE Power India, Dalmia Bharat Sugar, Zydus Wellness, EPL, Crisil, Unichem Labs, Gulf Oil Lubricants, Agri-Tech (India), Cholamandalam Finance, Uttam Sugar Mills and TCI Developers.

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 HDFC, Allcargo Logistics, Cummins India, Nelco, Suumaya Industries and MPS. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
TCS (Rs 1461.31 crore), Infosys (Rs 1147.63 crore), RIL (Rs 1077.77 crore), Tata Steel (Rs 1024.61 crore), MindTree (Rs 997.27 crore), Bharti Airtel (Rs 962.89 crore), Maruti Suzuki (Rs 946.89 crore), L&T (Rs 806.42 crore), Adani Enterprises (Rs 773.38 crore) and HDFC (Rs 743.98 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 highest trading turnovers in the day.

Most active stocks in volume terms
Vodafone Idea (Shares traded: 16.20 crore), NALCO (Shares traded: 8.86 crore), YES Bank (Shares traded: 6.26 crore), JP Power (Shares traded: 5.65 crore), SAIL (Shares traded: 5.11 crore), BHEL (Shares traded: 4.73 crore), PNB (Shares traded: 3.14 crore), NMDC (Shares traded: 3.04 crore), IDFC First Bank (Shares traded: 2.51 crore) and Zomato (Shares traded: 2.22 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Laxmi Organic Industries, HAL, ABB India, SKF India and Fortis Healthcare witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
CarTrade Tech and Hero MotoCorp witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bulls
Overall, the market breadth remained in favour of the bulls. As many as 343 stocks on the BSE500 index settled the day in the green, while 153 settled the day in the red.

Podcast: What led to the recovery in the markets?
Despite mixed global cues, the domestic equity market on Friday managed to settle at record high levels. What led to the smart recovery? Where is Nifty headed now? What are the technical charts suggesting?