nifty technical analysis: Ahead of Market: 10 things that will decide D-Street action on Saturday

Following the positive cues from the global peers, Indian equity indices closed higher on Friday after a three-day losing streak, led by IT, auto and energy stocks.

The blue-chip index NSE Nifty50 closed 0.75% higher at 21,622 points, while the S&P BSE Sensex ended 0.7% up to 71,683. They lost 1.24% and 1.22%, respectively, for the week.

The benchmarks tumbled nearly 3% from Tuesday to Thursday, mainly due to HDFC Bank’s slide following worries over its margins. Financial stocks slid 4.1% this week.

Here’s how analysts read the market pulse:

“Nifty remained sideward throughout the session following a strong start. The index has moved back above the critical near-term moving average. In the short term, the index is likely to consolidate within the bands of 21,500 and 21,700. A decisive breakout on either side would confirm a directional move,” said Rupak De, LKP Securities.

Ajit Mishra, SVP – technical research, Religare Broking, said, “We reiterate our cautious view citing the prevailing underperformance of the banking and eyeing the 21,700-21,850 zone to act as a hurdle. Traders should continue stock-specific approach and prefer hedged trades.”

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

US market

Wall Street’s main indexes climbed on Friday, driven by strength in chip and megacap stocks, while investors remained vigilant about ongoing corporate earnings and any hints on the timing of rate cuts.

The S&P 500 is less than 1% from breaching its record high despite a rocky start to the week, following mixed earnings from top investment banks and mostly disappointing comments on the possibility of early interest-rate cuts from central bankers globally.

At 9:49 a.m. ET, the Dow Jones Industrial Average was up 27.19 points, or 0.07%, at 37,495.80, the S&P 500 was up 6.91 points, or 0.14%, at 4,787.85, and the Nasdaq Composite was up 43.39 points, or 0.29%, at 15,099.04.

European shares

European shares edged higher on Friday, lifted by financials, but the benchmark index remained on course for a weekly decline following tempered rate-cut expectations.

The pan-European STOXX 600 index was up 0.2% as of 1319 GMT, extending gains from the previous session.

Banks rose 0.5%, powered by a 3.2% jump in KBC Group after Morgan Stanley upgraded the Belgian integrated bank-insurance group to “overweight” from “equal-weight”.

Tech View: Doji candle

Nifty on Friday ended 160 points higher to form a Doji candle on the daily chart as the index reclaimed its short-term moving averages but lacked decisiveness.

As long as the sharp opening downside gap of Wednesday remains open at 21,970, there is a higher probability of a ‘sell on rise’ in the market for the short term. Immediate support is at 21,550 level, said Nagaraj Shetti of HDFC Securities.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of HUDCO, Intellect Design, BHEL, Triveni Engineering & Industries, BPCL, and Safari Industries 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 Linde India, JM Financial, Max Healthcare, NHPC, Alok Industries, and Titan Company 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

HDFC Bank (Rs 8,131 crore), ICICI Bank (Rs 2,333 crore), IndusInd Bank (Rs 1,726 crore), RIL (Rs 1,423 crore), Axis Bank (Rs 1,316 crore), Bharti Airtel (Rs 1,316 crore), and TCS (Rs 1,159 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

HDFC Bank (Shares traded: 5.4 crore), Tata Steel (Shares traded: 3.2 crore), NTPC (Shares traded: 2.8 crore), ONGC (Shares traded: 2.6 crore), ICICI Bank (Shares traded: 2.3 crore), Power Grid (Shares traded: 2 crore), and Coal India (Shares traded: 1.5 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest

Shares of ONGC, Bharti Airtel, Titan Company, Apollo Hospital, BPCL, L&T, and Infosys among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure

No major stock hit its 52-week low on Friday.

Sentiment meter favours bulls

Overall, market breadth favoured bulls as 2,468 stocks ended in the green, while 1,337 names settled in the red.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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