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

Indian equity markets rose for the sixth session in a row on Tuesday, led by pharma, IT and FMCG stocks. The BSE Sensex ended 177 points higher at 62,682, while its broader peer Nifty 50 ended above the 18,600 level after touching a new peak of 18,678.

Here’s how analysts read the market pulse:

“The trend is likely to remain bullish as long as it remains above 18,500, where significant Put writing has been seen. On the higher end, resistance is visible at 18,800,” Rupak De, Senior Technical Analyst at LKP Securities, said.

“Technically, the market is consistently holding higher high and higher low formation, which is broadly positive. Hence, the support has now shifted to 18,550 from 18,450. As long as the index is trading above 18,550, the uptrend wave is likely to continue. Above which, the market could move up to 18,750-18,800,” Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, said.

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

US market
Wall Street's main indexes were little changed on Tuesday as growth stocks extended losses, while a rise in energy shares on the back of higher oil prices helped stave off declines. Five of the 11 major S&P 500 sector indexes were trading higher, with energy up 1.6% as crude prices jumped amid expectations that OPEC+ would agree to cut oil output during its December meeting.

The benchmark S&P 500 index is now headed for its second straight month of gains in November amid hopes of the U.S. Federal Reserve hiking interest rates in smaller increments and a handful of inflation readings showing a slight cooling in prices.

At 10:25 am ET, the Dow Jones Industrial Average was down 2.64 points, or 0.01%, at 33,846.82, the S&P 500 was up 4.29 points, or 0.11%, at 3,968.23, and the Nasdaq Composite was up 14.04 points, or 0.13%, at 11,063.54. The S&P index recorded no new 52-week high and one new low, while the Nasdaq recorded 34 new highs and 77 new lows.

European shares
European shares gave up gains on Tuesday as technology and consumer stocks slipped, offsetting a rally in commodity-linked shares spurred by hopes that Beijing could ease Covid-19 curbs following recent protests.

The pan-European STOXX 600 index was flat after having risen up to 0.5% following a strong rally in Asia where investors hoped that Chinese officials might announce some easing of pandemic-related curbs at a press briefing.

London's FTSE 100 outperformed and was up 0.5%. Oil majors BP and Shell, as well as commodity-related companies such as Rio Tinto and Glencore rose between 1.0% and 3.4% as crude and metal prices rallied.

The STOXX 600 is on course to end November higher on hopes of an easing in China's strict COVID-19 curbs and that U.S. monetary policy might be tightened at a less aggressive pace.

Tech View: Bullish Belt Hold candlestick pattern
Equity headline index Nifty on Tuesday formed a Bullish Belt Hold candlestick pattern on the daily charts as it scaled fresh 52-week high of 18,678.10, indicating consolidation in the market at new highs.

The index has been making higher highs from the last five sessions and supports are gradually shifting higher. “Now, it has to hold above 18,500 zones, for an up move towards 18,700 then 18,881 zones whereas supports are placed at 18,442 and 18,350 zones,” said Chandan Taparia of Motilal Oswal.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of CCL Products, IIFL Wealth Management, Sterling Wilson Solar, BSE, RBL Bank and ABB Power, among others.

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 Bombay Burmah, JSW Steel, Affle, JSPL, Nalco and HDFC, 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 1,385 crore), ICICI Bank (Rs 1,240 crore), HDFC Bank (Rs 1,012 crore), HDFC (Rs 700 crore), HUL (Rs 663 crore), Adani Enterprises (Rs 589 crore) and Maruti Suzuki (Rs 543 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
Tata Steel (Shares traded: 4 crore), ONGC (Shares traded: 1.4 crore), ICICI Bank (Shares traded: 1.3 crore), ITC (Shares traded: 1 crore), Tata Motors (Shares traded: 86 lakh), NTPC (Shares traded: 77 lakh) and SBI (Shares traded: 69 lakh) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Indian Railway Finance Corporation, Aditya Birla Capital, CCL Products, Union Bank of India, Bank of India, IDBI Bank and Britannia witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Laurus Labs, Amber Enterprises and Delhivery witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counter.

Sentiment meter favours bulls
Overall, market breadth favoured bears as 1,823 stocks ended in the red, while 1,663 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)