Ahead of Market: 12 things that will decide D-Street action on Wednesday

NEW DELHI: Bulls were in action on Tuesday as low-level buying pushed benchmark indices to log the biggest gain in three months. Analysts believe this is the right time to pick quality stocks at a cheap valuation.

Here's how analysts read the market pulse:

Independent Analyst Manish Shah said that the candle for the day was preceded by a bullish Harami pattern and also a bullish tweezers bottom pattern. The RSI, he said, has turned up from the low of 30 and it has moved higher above 40, adding that the MACD line has also curled up.

For the trend following traders, said Shrikant Chouhan of Kotak Securities, the level of 16,150 would be the trend deciding level, above which the positive momentum is likely to continue till 16,380-16,450.
That said, here’s a look at what some key indicators are suggesting for Wednesday’s action:

Wall St climbs on gains in banks
U.S. stocks rose on Tuesday, as Citigroup led a surge in bank shares after Berkshire Hathaway revealed a big stake and strong retail sales in April eased some concerns about slowing economic growth.

Microsoft Corp, Apple Inc, Tesla Inc and Nvidia Corp gained between 1.5% and 4.8%, providing the biggest boost to the S&P 500 and the Nasdaq.

At 11:34 a.m. ET, the Dow Jones Industrial Average was up 273.83 points, or 0.85%, at 32,497.25, the S&P 500 was up 58.24 points, or 1.45%, at 4,066.25, and the Nasdaq Composite was up 224.00 points, or 1.92%, at 11,886.80.

FTSE 100 lags European peers on strong pound
UK stocks advanced on Tuesday on hopes that China would ease its COVID-19 curbs and regulatory scrutiny, although strength in the pound following an upbeat employment report capped gains for the export-oriented FTSE 100.

The blue-chip index closed 0.7% higher, but lagged its continental peers as the pound jumped more than 1%.

Meanwhile, European exchanges closed higher and Wall Street's main indices also rose in mid-day trading, spurred by a nearly one-percent rise in April retail sales.

Tech View: Indecisive candle
Nifty50 formed a large bullish candle on the daily chart -- after making what looked like a Bullish Harami candle in the previous day, sending signs of reversal. With this, the index has chalked out a new range after offering strong support at the lower end of the 15,750-16,150 range in the last few sessions. More upside is likely in the coming days, analysts said.

F&O: Resistance at 16,100
On the call side highest OI was witnessed at 16,500, followed by a 17,000 strike price, while on the put side, the highest OI was at 16,000, followed by a 15,500 strike price, providing support to the Nifty index.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of Oil India, Abbott India, Coromandel International, Dhani Services, Nocil and Zensar Tech.

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 in none of the counters. A bearish crossover on the MACD on counters indicates that they have just begun their downward journey.

Most active stocks in value terms
Reliance Industries (Rs 1910 crore), Hindalco (Rs 1593 crore), Tata Steel (Rs 1309 crore), HDFC Bank (Rs 1089 crore), Tata Motors (Rs 1027 crore), Infosys (Rs 987 crore) and ICICI Bank (Rs 898 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
YES Bank (Shares traded: 16 crore), Vodafone Idea (Shares traded: 16 crore), Suzlon Energy (Shares traded: 5 crore), Life Insurance of India (Shares traded: 5 crore), GTL Infra (Shares traded: 4 crore) and SAIL (Shares traded: 4 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
No stocks witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Aurobindo Pharma, Orient Electric, Amber Enterprises and Sudarshan Chemical witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured gainers as 2,607 stocks ended in the green, while 737 names settled with cuts.