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

NEW DELHI: The market staged a rebound on Friday, thanks to buying across sectors and strong global cues. Traders welcomed a reprieve from the recent brutal sell-off.

Here's how analysts read the market pulse:

The steep decline of May 19 was arrested near the swing low of 15,735, said Gaurav Ratnaparkhi of Sharekhan, who added that the March low of 15,671 offered additional support on the downside.

The daily timeframe of the Nifty50 indicates that the index has made a double bottom around the 15,735 levels, said Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities.

Despite the rebound, we feel the market has not reached its bottom, since price patterns on the Nifty50 show that the uptrend has been significantly harmed, said Yesha Shah, Head of Equity Research, Samco Securities.

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

Wall Street ends mixed after punishing week
Wall Street ended mixed on Friday after a volatile session that saw Tesla slump and other growth stocks also lose ground.

The S&P 500 and the Nasdaq logged their seventh straight week of losses, their longest losing streak since the end of the dotcom bubble in 2001. The Dow suffered its eighth consecutive weekly decline, its longest since 1932 during the Great Depression.

The S&P 500 spent most of the session in negative territory and at one point was down just over 20% from its Jan. 3 record high close before ending down 18% from that level and flat for the day.

Closing down 20% from that record level would confirm the S&P 500 has been in a bear market since reaching that January high, according to a common definition.

The tech-heavy Nasdaq was last down about 27% from its record close in November 2021.

European stocks close higher
European shares rose on Friday, with a boost from defensive sectors after hopes of an economic recovery in major trading partner China were bolstered by more central bank stimulus, though they still ended the week in the red.

Travel and tourism stocks, financial services , healthcare and utilities led gains in Europe, rising between 1.5% and 2.0%, lifting the pan-European STOXX 600 index 0.7%. Over the week, though, the main index was down 0.5%.

Tech View: bullish candle formed
Nifty50 capitalised on a strong gap-up start as the index ended almost at day's higher. In the process, it breached its immediate resistance level of 16,150 and formed a bullish candle both daily and weekly scales. Analysts said more upside is in the offing and advised traders to be cautiously bullish for the week ahead.

F&O: Resistance at 16,400
It was one of the most difficult weeks for traders as markets have oscillated sharply on both sides. The alternate bouts of buying and selling perplexed market participants as to the primary trend of the index, said Ruchit Jain, Lead Research, 5paisa.com.

In our view, the recent activity in the Nifty, where it has taken support several times as it approached 15,700-15,800 and has faced resistance around 16,400 has changed the trend from down to sideways, he added.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of BHEL, Zomato, Hindustan Copper, HDFC Bank, Coal India, Zee Entertainment, LIC Housing Finance, Marico, Sun Pharma and Granules India.

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 Surani Steel Tubes, Solex Energy and Alps Industries. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
Reliance Industries (Rs 2,584.08 crore), Infosys (Rs 1,527.95 crore), Dr Reddy's Labs (Rs 1,043.03 crore), TCS (Rs 1,008.75 crore), Tata Motors (Rs 981.3 crore), HDFC Bank (Rs 913.10 crore) and ITC (Rs 907.09 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
ITC (Shares traded: 3.23 crore), Tata Motors (Shares traded: 2.35 crore), NTPC (Shares traded: 1.78 crore), SBI (Shares traded: 136 crore), ICICI Bank (Shares traded: 1.17 crore) and Infosys (Shares traded: 1.05 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Welspun Corp, Hindustan Aeronautics and ITCs stocks witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Container Corporation of India, Honeywell Automation, Supreme Industries and Firstsource Solutions witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured losers as 2,474 stocks ended in the black, while 875 names settled with cuts.