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

NEW DELHI: Indian stocks have seen some recovery in the market as investors grabbed the stocks at low valuations. Analysts also believe this is the right time to pick quality stocks at cheap valuation.

Here's how analysts read the market pulse:

"A long bull candle was formed on the daily chart with a gap up opening. Technically, this action indicates an upside breakout of the consolidation pattern at the 16,400 level. This is a positive indication and signals more upside for the short term," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

The overall structure shows that the index is on course towards 17,000 from a short term perspective, said Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan.

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

STOXX 600 at highest level in a month
The pan-European STOXX 600 closed at its highest level since April 29 today, rising 0.59% with tech names leading gains, up 2%.

Bets of a possible slowdown in U.S. monetary tightening and news that Shanghai will end its two-month-long COVID-19 lockdown from Wednesday pushed global stocks higher on Monday.

The day's gains continue last week's rally in Europe, which saw the STOXX 600 index climb 3% over five days. The US stock market is closed on account of Memorial Day.

Tech View: Bullish candle
Nifty50 formed a solid bullish candle on the daily chart after signalling a reversal in the previous week. In the process, the index has breached a sticky consolidation range of 15,700-16,400 on the upside. Analysts said levels around 17,000 are on the cards and that the 16,400 level would now act as immediate support for the index.

F&O: Support at 16,000
On the call side, the biggest open interest is at 17,000, followed by 16,700, meaning these are two resistance levels. On the put side, open interest converges at 16,300, followed by 16,500, providing support.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of 3M India, KPIT Tech, Schaeffler India, Laxmi Organic, Lux Industries and Coforge.

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 CRISIL, ITC, GMM Pfaudler, GE Shipping and Easy Trip Planners. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
Reliance Industries (Rs 1,688 crore), Infosys (Rs 1,656 crore), Adani Power (Rs 1,328 crore), HDFC (Rs 1288 crore), M&M (Rs 1158 crore), Jubilant Food (Rs 920 crore) and HDFC Bank (Rs 890 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
Vodafone Idea (Shares traded: 18 crore), Zomato (Shares traded: 12 crore), Suzlon Energy (Shares traded: 6 crore), JP Power (Shares traded: 5 crore), ONGC (Shares traded: 4 crore) and Adani Power (Shares traded: 4 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
M&M, EIF Parry and Blue Dart witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Sundaram Finance and Ipca Labs witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured gainers as 2,332 stocks ended in the green, while 1,136 names settled with cuts.