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

NEW DELHI: The market continues to be under pressure despite some buying recently. That pressure eventually led benchmark indices lower on Wednesday. Analysts believe this is the right time to pick quality stocks at a cheaper valuation.

Here's how analysts read the market pulse:

Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan, said the internal structure of the recent rise shows that Wednesday's negative close is a minor pause and the short term pullback is still intact.

Meanwhile, on a 15-minute chart, the positive moving average crossover is still intact as the 20-period MA is trading above the 50-period MA, said Subash Gangadharan, Senior Technical and Derivative Analyst at HDFC Securities.

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

Losses on Wall Street deepen, Dow -2.3%, Nasdaq -3.0%
Wall Street stocks were back in the red Wednesday, with poor results from retailer Target underscoring worries about corporate profits as companies navigate an inflationary environment.

After Tuesday's rally, all three major indices were decisively negative near midday, with the Dow Jones Industrial Average down 2.3 percent at 31,920.99.

The broad-based S&P 500 fell 2.6 percent to 3,981.19, while the tech-rich Nasdaq Composite Index slumped 3.0 percent to 11,625.08.

European stocks close lower
European stock market slumped as inflation data and corporate reports stoked investor fears about recession and earnings. News that UK inflation has spiked to a 40-year peak of nine percent in April helped push London stocks down 1.1 percent.

In the eurozone, Frankfurt fell 1.3 percent and Paris shed 1.2 percent in value.

The pan-European Stoxx 600 provisionally closed down by 1.1%, with tech stocks shedding 2.8% to lead losses as most sectors and major bourses entered negative territory.

Tech View: Indecisive candle
Nifty failed to capitalise on a firm start, as it ended up forming a small bearish candle on the daily chart, with a long upper wick, reflecting selling pressure near the 16,400 level. But analysts are unfazed and see no major impact on the positive momentum post Tuesday's big bullish candle.

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 15,800 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 Wockhardt, GE Shipping, MRPL, Kalpataru Power, Petronet LNG and Thermax.

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 2022 crore), Ruchi Soya (Rs 1936 crore), Bharti Airtel (Rs 1336 crore), Adani Power (Rs 1057 crore), HDFC Bank (Rs 1039 crore), Infosys (Rs 1006 crore) and Kotak Bank (Rs 986 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
YES Bank (Shares traded: 20 crore), Vodafone Idea (Shares traded: 9 crore), GTL Infra (Shares traded: 7 crore), Zomato (Shares traded: 6 crore), Indian Oil (Shares traded: 4 crore) and Suzlon Energy (Shares traded: 4 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
GE Shipping, MRPL, Coromandel International and Ratnamani Metal stocks witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Route Mobie, Metropolis Healthcare, Dr Lal Pathlabs, Amber Enterprises, HPCL, BPCL and Thyrocare Tech 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 1,866 stocks ended in the green, while 1,479 names settled with cuts.