Ahead of Market: 10 things that will decide stock action on Monday

After some stability was restored in Adani Group stocks, Indian indices recovered sharply to end higher. Nifty at the close ended over 1% higher at 17,854 points. Sectorally, Nifty PSU Bank index led the gains advancing over 3% after Bank of Baroda posted healthy Q3 earnings. Next week the market will keep an eye on US Fed Chair Powell's speech due on Tuesday.

Here's how analysts read the market pulse:
“Nifty, in the week gone by, had breached its 40 WEMA on an intraweek basis; however received support near the lower end of the downward sloping channel & the 200 DMA & recovered thereon. The recovery picked up momentum on Friday as the index surpassed the hurdle zone of 17650-17700. Consequently, the Nifty is approaching to climb above the 20 DMA & can test the level of 18000 on the higher side. On the other hand, the near term support is placed at 17700 with the major support near 17350,” Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas, said.

“Nifty made a sharp turnaround from the early morning lows on Feb 03 and closed the day and week in the positive. After falling 35 percent in morning trade, Adani Enterprises ended in the green after rating agencies showed confidence in Adani's capability of repaying debt.

Activities in the Indian services sector eased in January but continued to remain above its long run average. Nifty managed to close above the resistance of 17760 and in the process registered a weekly gain of 1.42%. Now the Nifty could test the 17972-18063 band in the near term while 17542 could now act as a support," Deepak Jasani, Head of Retail Research, HDFC Securities, said.

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

Wall-St ends down after stunning jobs growth raises Fed questions

Major U.S. stock indexes ended lower on Friday after surprisingly strong jobs data sparked concerns about aggressive Federal Reserve action, while investors digested a mixed bag of megacap company earnings reports.

The S&P 500 still posted a weekly gain and stood not far from five-month highs, while the Nasdaq tallied its fifth straight weekly rise, its longest such streak since late 2021.

European shares hit by weak earnings from U.S. tech giants
European shares fell on Friday, weighed down by losses in technology stocks after disappointing earnings overnight by their major U.S. counterparts rekindled concerns about global economic demand and the impact of high interest rates.

The pan-European STOXX 600 was down 0.5% as of 0812 GMT.

The technology sector index fell 0.6%, led by a near 2% drop in Apple supplier Infineon, while real estate stocks were down 1.5%.

Tech View: Long bull candle
A long bull candle was formed on the daily chart with a long lower shadow. This market action signals an upside breakout of the crucial overhead resistance of 17,750-17,800 levels. “This is a positive indication and one may expect further upside in the short term. The formation of long lower shadows in the last few daily candles around 17500 levels indicates a strong base for the Nifty and the said support is unlikely to be broken on the downside soon,” Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Zomato, ICICI Bank, IDFC Limited, Titan and M&M Financial Services among others.

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 signaling weakness ahead
The MACD showed bearish signs on the counters of NHPC, Vedanta, Maan Aluminium, Greaves Cotton and Goodluck India among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Adani Enterprises (Rs 5946 crore), Adani Ports (Rs 4013 crore), Ambuja Cements (Rs 2035 crore), RIL ( Rs 2643 crore) and SBI (Rs 1729 crore) were among the most active stocks on NSE in value terms.

Most active stocks in volume terms
Yes Bank (Shares traded: 15.69 crore), Vodafone Idea (Shares traded: 14.37 crore) PNB (Shares traded: 11.41 crore) and Adani Ports (Shares traded: 8.96 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Bombay Super Hybrid, Rajesh Exports, Supreme Industries, M&M and Blue Star among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Divis Labs, Adani Transmission, Adani Green Energy, Crompton Greaves and Gland Pharma among others hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured bears as 2,310 stocks ended in the red while 1,237 names settled with gains.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)