Ahead of Market: 11 things that will decide stock action on Wednesday

NEW DELHI: Nifty50 on Tuesday formed a ‘Doji’ candle on the daily chart, suggesting indecisiveness among investors. Analysts said the index will need to close above the 16,350 level to witness more strength in the rally.

Here’s how analysts read the market pulse:

Mazhar Mohammad of said unless Nifty closes above 16,350 with broader market participation, further strength is unlikely. “A close below 16,170 can usher in a short-term downswing, with initial targets present at 16,000-15,900 levels,” he said.

Mohit Nigam, Head – PMS, Hem Securities, said, the market is capturing any significant dip as a good opportunity to invest. “The benchmark indices are doing pretty well and are likely to continue its bull run, keeping support at 16,100 and with a near term-resistance at 16,400,” he said.

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

Wall St rises ahead of infra bill vote

Wall Street’s main indexes edged higher on Tuesday, helped by a rebound in oil stocks, while investors awaited a Senate vote on a much-anticipated $1 trillion infrastructure bill. Six of the 11 major S&P sectors rose in early trading. At 9:58 a.m. ET, the Dow Jones Industrial Average was up 70.53 points, or 0.20 per cent, at 35,172.38, the S&P 500 was up 8.41 points, or 0.19 per cent, at 4,440.76, and the Nasdaq Composite was up 23.54 points, or 0.16 per cent, at 14,883.72.

European stocks climb on strong earnings

European stocks hit record highs on Tuesday, extending gains for a seventh straight session as investors took comfort from strong earnings reports and economic recovery prospects despite concerns about the Delta variant of COVID-19. The pan-European STOXX 600 index gained 0.4% to notch an all-time high of 472.95 points.

Tech View: Nifty bulls indecisive at peak

Nifty50 on Tuesday formed a Doji candle on the daily chart, suggesting indecisiveness among the market participants. To be sure, this was the fourth straight session when Nifty50 breached the 16,300 level intraday but could not close above it. During this period, the 16,200 level emerged as good support for the index. Among other observations, Tuesday’s candlestick was the third Doji formation in the last four sessions. Also, the advance-to-decline ratio remained tilted in favour of the bears.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of JHS Svendgaard Labor, Max Healthcare, Trent, Dhani Services, Dynamatic Techno, STL Global, Alkem Laboratories, Vishwaraj Sugar, IFB Agro Industries, Responsive Industries, Stampede Capital, Mold-Tek Packaging, Asian Hotels (West), SMS Lifesciences and Adroit Infotech.

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 Steel Authority, SBI, Federal Bank, Jindal Steel & Power, Tata Steel, Titagarh Wagons, Jindal Stainless, REC, Orient Paper, NOCIL, Shalby,

, Jindal Stainless, Can Fin Homes, KNR Constructions, , Gokaldas Exports, BLS International, , Pitti Engineering, HG Infra Engineering, Uflex, NCL Industries, Mayur Uniquoters, Bajaj Electricals, Aakash Exploration, Ratnamani Metals, MMP Industries, The United Nilgiri, Orbit Exports, Krishana Phoschem, V Mart Retail, DIC India, Vishal Fabrics, The Investment Trust and Schaeffler India. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

Bharti Airtel (Rs 2,096.90 crore), HDFC (Rs 1,249.24 crore), IRCTC (Rs 1,215.65 crore), SBI (Rs 1,191.65 crore), Tata Steel (Rs 1,178.69 crore), RIL (Rs 1,152.49 crore), Infosys (Rs 1,146.31 crore), HDFC Bank (Rs 1,122.07 crore), Sona BLW Precision Forgings (Rs 1,073.69 crore) and Escorts (Rs 915.08 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

Vodafone Idea (Shares traded: 42.46 crore), YES Bank (Shares traded: 8.79 crore), PNB (Shares traded: 6.42 crore), SAIL (Shares traded: 6.22 crore), Bank of Baroda (Shares traded: 4.97 crore), Future Consumer (Shares traded: 4.56 crore), IDFC First Bank (Shares traded: 4.39 crore), NALCO (Shares traded: 4.34 crore), Zomato (Shares traded: 4.32 crore) and Motherson Sumi (Shares traded: 3.81 crore) were among the most traded stocks in the session.

Stocks showing buying interest

Max Healthcare, Cummins India, Bharti Airtel, Gland Pharma and BASF India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure

Jubilant Life and Alembic Pharma 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 85 stocks on the BSE500 index settled the day in the green, while 413 settled the day in the red.

Podcast: Is market momentum shifting to largecaps?

Broader markets witnessed sharp selling and fell up to 2 per cent. Is market momentum shifting from midcaps and smallcaps to largecap stocks? Will Nifty be able to extend the rally and top 16,500 in the coming days? What are the technical charts suggesting?

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