NEW DELHI: Nifty50 on Monday formed a bearish candle on the daily chart and fell below the 17,400-mark, signalling weakness ahead. Analysts said 17,240-270 levels may offer some support going ahead.
Here’s how analysts read the market pulse:
Independent analyst Manish Shah said one needs to be careful as Nifty50 may be getting into a prolonged corrective decline. “Support for Nifty50 is at the 17,240 level, and we could also see a decline towards 17,050. For the momentum to turn positive, Nifty50 needs to move above 17,580 and 17,600 levels,” he said.
Mazhar Mohammad of Chartviewindia.in said this market may be changing its trajectory from ‘buy on dips’ to ‘sell on rallies’ mode. “The only solace for the bulls is the fact that Nifty50 is holding above its critical short-term moving averages. Hence, a bounce going forward can’t be ruled out,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Tuesday’s action:
Wall Street dips on growth worries
Wall Street’s main indexes tumbled on Monday, as concerns about the pace of a global recovery hit economy-linked stocks at the start of a week in which the Federal Reserve will decide on potentially tapering its pandemic-era stimulus. Investors flocked to the safety of bonds on worries about the default of Chinese property developer Evergrande. At 9:39 a.m. ET, the Dow Jones Industrial Average was down 463.80 points, or 1.34 per cent, at 34,121.08, the S&P 500 was down 60.05 points, or 1.35 per cent, at 4,372.94, and the Nasdaq Composite was down 244.94 points, or 1.63 per cent, at 14,799.03.
Evergrande scare weighs on European stocks
European shares tumbled on Monday as growing solvency worries about property group China Evergrande spooked investors, in a dour start to a week packed with meetings of major central banks. The pan-European STOXX 600 index was down 1.7 per cent, with mining stocks plunging 3.6 per cent on a slide in commodity prices.
Tech View: Nifty sends out sell signal on MACD
Nifty50 on Monday took a beating, falling below the 17,400-mark, far off its immediate support at 17,500, to send out weak signals. The fact that the index fall came after Friday’s Dark Cloud Cover formation and that the momentum indicator MACD has sent out ‘sell’ signals suggest that the index could be in for some more pain ahead. The 17,240-270 levels can offer some support to the index going ahead, analysts said. It formed a bearish candle on the daily chart.
F&O: India VIX jumps above 17-level
India VIX moved up sharply by 14.86 per cent from 15.23 to 17.49 level. A spurt in India VIX may cause volatile swings and trigger some profit booking in the market. VIX is hovering at its highest levels in the last 76 trading sessions. Options data suggested a broader trading range between 17,000 and 17,800 levels while the immediate trading range stood between 17, 200 and 17,600 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Inox Leisure, Dhani Services, Bajaj Holdings, NDTV, Golden Tobacco and GRP.
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 National Aluminium, Hindalco Industries, IDBI Bank, Trident, DLF, Reliance Industries, Vakrangee, Aditya Birla Fashion, PetronetLNG, Jindal Stainless, Mirza International, Indraprastha Gas, Bombay Dyeing, Havells India, Gayatri Projects, HDFC Life Insurance, IIFL Finance, Tata Coffee, City Union Bank, Container Corporation, Aarti Industries, Asian Paints, Muthoot Finance, JK Tyre & Industries, Orient Cement, Brigade Enterprises, Deepak Nitrite, ICICI Pru Life, Bata India, Berger Paints, PI Industries, United Breweries, Linde India, Dollar Industries, Bharat Gears, Tata Investment, Gland Pharma, Mahindra Lifespace, ABB Power Products, TCNS Clothing, Esab India, Mittal LifeStyle, Technocraft Industries, MMP Industries, MRF, Keynote Financial, Nilkamal, WABCO India, Greenlam Industries and P&G Hygiene & Health. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
Tata Steel (Rs 3651.23 crore), IRCTC (Rs 1764.39 crore), ITC (Rs 1660.03 crore), Zee Entertainment (Rs 1371.16 crore), RIL (Rs 1303.95 crore), Kotak Bank (Rs 1180.86 crore), Bharti Airtel (Rs 1022.74 crore), Infosys (Rs 959.99 crore), SBI (Rs 817.48 crore) and Hindalco (Rs 813.33 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 the highest trading turnovers in the day.
Most active stocks in volume terms
Vodafone Idea (Shares traded: 68.17 crore), YES Bank (Shares traded: 18.07 crore), GMR Infra (Shares traded: 8.95 crore), ITC (Shares traded: 7.04 crore), SAIL (Shares traded: 6.49 crore), Suzlon Energy (Shares traded: 5.61 crore), Zee Entertainment (Shares traded: 5.28 crore), PNB (Shares traded: 4.95 crore), Indian Hotels (Shares traded: 4.64 crore) and NALCO (Shares traded: 3.07 crore) were among the most traded stocks in the session.
Stocks showing buying interest: HLE Glasscoat, Indian Hotels, GMR Infra, Timken India and Tata Elxsi witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
ABM International, Bannari Amman Spinning, International Conveyors, CarTrade Tech, Krsnaa Diagnostics and Rolex Rings 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 97 stocks on the BSE500 index settled the day in the green, while 400 settled the day in the red.
Podcast: Can Evergrande crisis trigger selloff?
Domestic equity markets kicked off the week on a negative note on widespread pessimism in global markets. The drop in commodity prices and the Evergrande crisis in China made the market jittery. Metal stocks bled, whereas hotels and FMCG players saw some buying. The steep fall made equity investors poorer by Rs 3.78 lakh crore during the session. Can think China’s Evergrande crisis can trigger global selloff? What to expect from the US Fed meeting this week?Internet Explorer Channel Network