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

NEW DELHI: Nifty50 on Monday formed a ‘Doji’ candle on the daily chart, suggesting indecisiveness among investors. Though signs of weakness emerged in the market, analysts remained bullish about the market sentiments.

Here's how analysts read the market pulse:

Mazhar Mohammad of Chartviewindia.in said Nifty50 can target the 17,500-600 zone if it keeps sustaining the 17,345-level. "Some weakness can be expected on Tuesday if Nifty50 slips below the 17,345 level," he said.

Gaurav Ratnaparkhi of Sharekhan said the sideways action has allowed the overbought momentum indicator on the hourly chart to cool off a bit. "As long as the index trades above 17,300, the short-term trajectory is expected to remain positive," he said.

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

Wall Street remains closed
US stock markets remain shut on September 6th (Monday) on the occasion of Labor Day. On Friday, Nasdaq ended at a new peak but the other main Wall Street indexes fell. The S&P 500 lost 1.52 points, or 0.03 per cent, to 4,535.43 and the Dow Jones Industrial Average fell 74.73 points, or 0.21 per cent, to 35,369.09. The Nasdaq Composite added 32.34 points, or 0.21 per cent, to 15,363.52.

European shares climb higher
European equities surged very close to their lifetime peak with the STOXX 600 crossing the finish line up 0.7% at 475.3 points, less than one point below its August high. London's FTSE 100 closed the session up 0.7%, with personal goods and industrial services stocks jumping 1.9% and 1.7%, respectively.

Tech View: Nifty hints at pause in momentum
Nifty50 made a fresh high for the third session in a row. The fact that the index is also trading in the overbought territory has raised the possibility of a halt in the ongoing momentum, even as analysts see no clear sign of weakness for now.

F&O: VIX moves above 15 level
India VIX moved up 3.89 per cent from 14.54 to 15.10 level. Volatility rose because of the pressure on Call writers, as the market has been gradually hitting new highs every day. Now, VIX needs to hold below the 13-level to continue its bullish stance, but a higher VIX level may cause some volatile swings in the market. Options data suggested a broader trading range between 16,800 and 17,800 levels while an immediate trading range stood between 17,100 and 17,500 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Welspun India, Vedanta, Indiabulls Real Estate, Jindal Steel & Power, Manappuram Finance, Spencer's Retail, Firstsource Solution, HCL Technologies, Caplin Point Lab, Sunteck Realty, PVR, JK Tyre & Industries, Dhani Services, Jindal Worldwide, JM Financial, Sadbhav Engineering, Happiest Minds Tech, Sun TV Network, Godrej Agrovet, Wockhardt, J B Chemicals & Pharma, Angel Broking, HT Media, Solara Active Pharma, JBM Auto, Summit Securities, Swelect Energy System and Lakshmi Finance.

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, Sun Pharma Advanced Research, Siemens, UTI AMC, Kabra Extrusion, Ramkrishna Forgings, GE T&D India, India Glycols, South West Pinnacle and KSB. 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 3796.72 crore), IRCTC (Rs 1512.52 crore), NALCO (Rs 1288.28 crore), Tata Steel (Rs 999.37 crore), Adani Enterprises (Rs 891.57 crore), Infosys (Rs 836.44 crore), Wipro (Rs 833.48 crore), Indian Energy Exchange (Rs 721.00 crore), IndiaMART (Rs 681.38 crore) and Bajaj Finance (Rs 676.07 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: 25.27 crore), NALCO (Shares traded: 13.01 crore), GTL Infra (Shares traded: 6.40 crore), YES Bank (Shares traded: 5.90 crore), Alok Industries (Shares traded: 5.48 crore), Trident (Shares traded: 4.99 crore), Vakrangee (Shares traded: 4.38 crore), MPS Infotecnics (Shares traded: 4.32 crore), SAIL (Shares traded: 4.10 crore) and Zomato (Shares traded: 3.48 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Prestige Estate, Sundram Fasteners, Bajaj Electrical, Oberoi Realty and Hatsun Agro witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Nandani Creation, Yuken India, Autolite (India) and Suvidhaa Infoserve 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 259 stocks on the BSE500 index settled the day in the green, while 234 settled the day in the red.

Podcast: Sensex, Nifty50 at new highs. What next?

The domestic market kicked off the new week on a higher note. BSE Sensex added 170 points to settle just below 58,300. Nifty 50 gained 54 points to close above 17,375. It scaled 17,400-mark during the session. BSE midcap and smallcap indices ended in the green. What were the reasons behind the rally? What are the factors that will sway D-Street sentiment going ahead?