Ahead of Market: 10 things that will decide D-Street action on Monday

Benchmark indices ended Friday’s session logging gains for the second consecutive day. Sensex closed just shy of 60,000 points at 59,959, while Nifty ended 50 points higher at 17,787 points. Broader markets however lagged in trade today and underperformed headline indices.

Palak Kothari, Senior Technical Analyst, Choice Broking said, “The Indian Benchmark ended on a green note on Friday after a gap-up opening, the index made an intraday low at 17723.70 but the bull took a charge and manage to close the session at 17786.80 level with a gain of 49.85 points. While the bank nifty closed the session at the 40990.85 level with a loss of 308.45 points.”

Rupak De, Senior Technical Analyst at LKP Securities said, "Nifty remained volatile during the day before closing on a muted note. The consolidation continued as the index failed to give any directional move. On the daily timeframe, the index has sustained above the crucial moving average, confirming the short term uptrend. Over the short term, the trend may remain sideways to positive. On the lower end, support is visible at 17700/17550; resistance on the higher end is placed at 17850/17950."

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

US market
Wall Street closed sharply higher on Friday, capping another strong week with gains led by Apple and other companies that made even bigger profits during the summer than expected.

The S&P 500 rose 2.5% and marked its first back-to-back weekly gain since August. Stocks have revived recently partly on hopes for a dialing down later this year of the big interest-rate hikes that have been shaking the market.

More recently, many big U.S. companies have been reporting stronger earnings than expected, though the bag remains decidedly mixed. Apple, Intel, and Gilead Sciences jumped following strong reports, which helped offset a discouraging forecast from Amazon

European shares closed higher European shares closed higher on Friday, as upbeat cues from Wall Street helped offset early losses emanating from weaker commodity prices and mixed earnings reports.

After falling as much as 1.1% earlier, the pan-European STOXX 600 index rose as the session wore on, closing up 0.1% at a fresh five-week high.

Tech View
On the weekly charts, Nifty established a hammer candlestick formation, which is suggestive of indecisiveness between bulls and bears.

Nifty has been trading near the 78.6% retracement of the entire September decline. The key Fibonacci level is near 17,800. The hourly chart shows that the index is in process of forming a distribution near this key hurdle. The hourly momentum indicator has developed a negative divergence, which is a sign of exhaustion, said Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trend in the counters of Ashok Leyland, Wipro, Equitas Holdings, Mirc Electronics and Max Healthcare 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 signalling weakness ahead
The MACD showed bearish signs on the counters of IDFC First Bank, Tata Chemicals, IDFC, Sumitomo Chemical and ITD Cementation 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
RIL(Rs 2038 crore), Maruti Suzuki (Rs 1742 crore), ICICI Bank (Rs 896 crore), RBL Bank (Rs 804 crore), and HDFC (Rs 777 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
PNB (Shares traded: 11.83 crore), BHEL(Shares traded: 7.03 crore), RBL Bank (Shares traded: 5.87 crore), Zomato (Shares traded: 5.67 crore) and Vodafone Idea (Shares traded: 5.13 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Aegis Logistics, Maruti Suzuki, Narayana, Craftsman Automation and Cummins 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 Nykaa, Delhivery, Piramal Pharma, Birlasoft, Motilal Oswal and Prince Pipes among others witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured losers as 1,456 stocks ended in the green, while 1,996 names ended in the red.

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