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

NEW DELHI: Nifty on Tuesday formed a large bearish candle on the daily scale, as it failed to hold the crucial 15,750 level. Analysts said the ongoing consolidation is likely to continue and Nifty may continue to move in the 15,900-600 range.

Here's how analysts read the market pulse:-

Mazhar Mohammad of Chartviewindia.in said a major downswing is unlikely as long as the index holds above the 15,600 level. "Bears will gain an upper hand if the index fails to defend the 15,650-600 range," he said.

Gaurav Ratnaparkhi of Sharekhan said the index is in a consolidation mode and is moving towards its lower end of the consolidation range. "A dip towards 15,650-15,600 can be taken as a fresh buying opportunity from a short-term trading perspective," he said.

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

Wall Street comes off record highs
US stock indices retreated from record highs on Tuesday ahead of earnings reports from the most valuable companies on Wall Street and in the run-up to the two-day Fed meeting. At 9:49 a.m. ET, the Dow Jones Industrial Average was down 176.38 points, or 0.50 per cent, at 34,967.93 and the S&P 500 was down 17.99 points, or 0.41 per cent, at 4,404.31. The Nasdaq Composite was down 78.17 points, or 0.53 per cent, at 14,762.54.

European shares slip after China stks tank
European stocks lost ground on Tuesday after falls in Chinese shares and Reckitt Benckiser's warning on margins ahead of earnings updates from big fashion retailers later in the day. The pan-European STOXX index fell 0.5% in its second straight session of losses. Worries about tighter regulation of China's heavyweight technology sector fuelled a selloff in global markets this week despite optimism about the ongoing U.S. and European earnings season.

Tech View: Nifty forms bearish candle
Nifty50 on Tuesday closed below the 15,750 level and formed a large bearish candle on the daily scale. But analysts do not see it as a sign of weakness as the 50-pack index has been trading in the broader 15,900-600 range for 29 sessions now. Chances are the index may find good support near the lower end of the range, they said, adding that the ongoing consolidation may continue going ahead.

F&O: India VIX jumps 6%
India VIX moved up 6.29 per cent from 12.45 to 13.23 level. A spike in volatility since the last two sessions is giving profit booking decline, but overall lower volatility indicates that buying interest could emerge again at meaningful support zones. Options data suggested a broader trading range in between 15,600 and 15,900 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Jindal Saw, Tata Steel BSL, Phillips Carbon, Gabriel India, LT Foods, Sterling and Wilson, Vakrangee, Titagarh Wagons, Welspun Corp, Max Financial Services, ICICI Pru Life, APL Apollo Tubes, Pfizer, Westlife Development, TCI, Hitech Corporation, Godfrey Phillips, Ajanta Pharma, Mold-Tek Packaging, Nxtdigital and NBI Industrial 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 Firstsource Solution, Happiest Minds Tech, Sun Pharma Advanced Research, Chambal Fertilisers, India Cements, Gujarat Gas, Parag Milk Foods, IRCTC, Asian Paints, Voltas, IIFL Securities, Sical Logistics, Raymond, Berger Paints, Torrent Pharma, Mahindra Holidays, Orient Abrasives, Alkem Laboratories, Force Motors, Pidilite Industries, SRF, Cupid, 5Paisa Capital, Cholamandalam Finance, Sasken Technologies, Somany Ceramics, Saksoft, TTK Healthcare, 3P Land Holdings and Balaxi Pharmaceuticals. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Zomato (Rs 3,390.74 crore), Dr. Reddy's (Rs 2,918.04 crore), HDFC Bank (Rs 1,616.74 crore), Tata Motors (Rs 1,612.31 crore), Tata Steel (Rs 1,367.55 crore), Bajaj Finance (Rs 1,296.03 crore), Hindalco (Rs 1,171.63 crore), Axis Bank (Rs 1,144.70 crore), SBI (Rs 1,037.14 crore) and RIL (Rs 1,030.07 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
Zomato (Shares traded: 24.03 crore), Reliance Communication (Shares traded: 15.74 crore), Vodafone Idea (Shares traded: 14.12 crore), YES Bank (Shares traded: 13.51 crore), Suzlon Energy (Shares traded: 7.94 crore), Tata Motors (Shares traded: 5.51 crore), JP Power (Shares traded: 5.36 crore), NALCO (Shares traded: 5.20 crore), SAIL (Shares traded: 4.54 crore) and PNB (Shares traded: 4.19 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Abbott India, ACC, DLF, Avenue Supermarts, CCL Products, APL Apollo Tube, Manappuram Finance, KPR Mill and Welspun India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.

Stocks seeing selling pressure
Alembic Pharma, KPI Global Infrastructure and Suryoday Small Finance Bank witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bears
Overall, the market breadth remained in favour of the bears. As many as 180 stocks on the BSE500 index settled the day in the green, while 319 settled the day in the red.

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