Ahead of the market: 10 things that will determine D-Street action on Monday

Indian benchmark equity indices closed marginally lower on Thursday, posting their sixth weekly loss in seven, as worries about a slowdown in consumption added to worries about declining earnings and foreign flows.

The NSE Nifty closed 0.11% below its 200-day moving average for the first time since April 2023 at 23,532. The BSE Sensex ended 0.14% lower at 77,580.31.

Here’s how analysts pulse the market:

“On Thursday, the Nifty closed near its 200-day EMA, forming a gravestone doji-like pattern on the daily chart, indicating bearish sentiment. This suggests a ‘sell on rise’ approach as the index remains in the oversold zone near the key EMA. The level is likely to bounce, but if the Nifty breaks below the 200-day EMA, the index May intensify with resistance at 23,650. Term trading range,” said Rupak De of LKP Securities.

Sharekhan’s Jatin Gedia said, “On the daily chart, we can observe that the index is trading around the 200-day moving average (23,556), which is a crucial support level. There could be a pullback, as the hourly A momentum indicator triggers a positive crossover, and anything towards 23,700-23,750. The pullback should be used as a selling opportunity, as the overall trend remains negative, consistent with the 61.82% Fibonacci retracement level.”

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

US Market:

Wall Street’s main indexes closed lower on Friday after Federal Reserve Chairman Jerome Powell hinted at a slowdown in interest rates and investors reacted to US President-elect Donald Trump’s cabinet picks.

Powell on Thursday cited continued economic growth, a solid job market and inflation above the US central bank’s 2% target as reasons he could afford to be cautious with the pace and scope of future rate cuts.

Traders increased bets that the Fed would leave rates unchanged at its December meeting, pricing in a roughly 42% chance, up from about 14% a month ago, according to the CME FedWatch tool. They also dialed back expectations for easing in 2025.

The view was bolstered by economic data on Friday that showed US retail sales rose slightly more than expected in October. Import prices also rose and data released on Wednesday and Thursday showed sticky inflation.

European share:

European shares fell on Friday after disappointing earnings, worries about the impact of US President-elect Trump’s policies on global economies and businesses and a jump in Treasury yields.

The pan-European STOXX 600 index fell 0.8%, trading above a three-month low hit earlier this week. The Swiss benchmark, which consists mostly of European healthcare companies, fell 1.3%.

Tech View:

Technically, on a daily basis the index has formed a doji candle close to its 200-day exponential moving average (DEMA) support indicating uncertainty. The 200-DEMA is placed around 23,540.

23,500-23,540 range will act as an immediate support zone for the index. A strong break below 23,500 will push the index further down to 23,300-23,200 levels, where the trend line support is placed. Overall, the short-term trend is down, but as long as Nifty remains above 23,500, a pullback rally is possible, said Asit C. Hrishikesh Yedve of Mehta Investment Intermediates said.

In open interest (OI) data, the highest OI on the call side was seen at 23,600 and 23,700 strike prices, while on the put side, the highest OI was seen at 23,500 strike price followed by 23,550.

Stocks Showing Bullish Bias:

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on counters of Network18 Media & Investments, Policy Bazaar, Aegis Logistics, Godrej Agrovet, United Spirits and Astral.

MACD is known for indicating the opposite trend in traded securities or indices. When 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 signaling further weakness:

MACD showed bearish signals on the counters of Deepak Fertilizers, Poonawalla Fincorp, TVS Supply Chain Solutions, Canes Technology, Chambal Fertilizers & Chemicals and Varoc Engineering. A bearish crossover on MACD on these counters indicates that they have started their downward journey.

Most active stocks by value:

HDFC Bank (Rs 2,297 crore), Zomato (Rs 2,272 crore), RIL (Rs 1,593 crore), HAL (Rs 1,576 crore), Eicher Motors (Rs 1,412 crore), Jio Financial Services (Rs 1,349 crore) ), and ICICI Bank (Rs. 1,349 crore) at Rs. 1,193 crore), was one of the most active stocks on the NSE in terms of value. High activity on a counter in terms of value can help identify counters with the highest trading turnover in a day.

Most active stocks in terms of volume:

Vodafone Idea (shares traded: 41.7 crore), Zomato (shares traded: 8.4 crore), Yes Bank (shares traded: 6.7 crore), Suzlon Energy (shares traded: 5.6 crore), JP Power (shares traded: 4.2 crore), Jio Financial Services (shares traded: 4.2 crore), and Tata Steel (shares traded: 3.6 crore) among others were among the most traded stocks of the session on the NSE.

Stocks showing buying interest:

Shares of HCL Technologies saw strong buying interest from market participants as they scaled their fresh 52-week high, indicating bullish sentiment.

Selling Pressure in Stocks:

Shares of Akums Drugs, Chennai Petroleum Corporation, Westlife Foodworld, Nestlé India, IndusInd Bank, Happiest Minds and CreditAccess Gramee touched their 52-week lows, indicating bearish sentiment on the counter.

Sentiment Meter Bulls:

Overall, market breadth favored the bears as 2,077 stocks ended in the green, while 1,887 names settled in the red.

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