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

Indian benchmark equity indices closed higher on Friday, led by auto stocks that made valuations relatively more attractive after last week’s sharp decline.

The Nifty 50 ended the day up 0.27% at 23,813, while the BSE Sensex gained 0.29% at 78,699. Both benchmarks rose about 1% this week, the most in 30 months, after a 5% slide last week, as the US Federal Reserve’s forecast of fewer rate cuts in 2025 tarnished the appeal of emerging markets.

Here’s how analysts pulse the market:

“Technically, Nifty managed to cross the 200-day simple moving average (200-DSMA) on the daily chart, but failed to sustain above it by forming a doji candle. On the weekly chart, the index formed an inner bar candlestick pattern, 23,500 Placed around 23,860 showing strong demand near the -23,540 zone is, which will act as an immediate barrier for the Nifty at 23,500 and 23,900, with breakouts on either side defining its next move,” Asit C. said Hrishikesh Yedve, Mehta Investment Intermediates.

“The 23,900-24,000 zone, underpinned by heavy call writing, poses a significant barrier. Meanwhile, the 200-DEMA and the key 23,700-23,600 band, strengthened by significant put writing, are seen strengthening,” said Dhupesh Dhameja of SAMCO Securities. A breakout above 24,000 for the bulls is possible for the index Short-covering rally towards 24,500 However, unless such a breakout occurs, a breakdown below 23,500 remains prudent, which could pull the index. 23,150–23,000 zone, where strong put writing provides additional support.”

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

US Market:

Wall Street’s holiday cheer came to an abrupt end on Friday, with all three major benchmarks closing lower in a broad-based sell-off that also hit tech and growth stocks that had led markets higher during most of the short trading week.

The decline ended a five-season winning streak for the Dow Jones Industrial Average that followed a 10-season losing streak, the worst losing streak since 1974.

European share:

Europe’s STOXX 600 index posted its first weekly advance in three on Friday, lifting healthcare and financial stocks, closing a holiday-shortened week.

The pan-European benchmark closed up 0.7%, its highest in a week, and rose nearly 1% in a week where trading volume was below average and many markets remained closed throughout the period.

Most bourses across the region were also closed, with Germany’s DAX up 0.7%, France’s CAC 40 adding 1%, while Britain’s FTSE 100 closed up 0.2%.

Tech View:

Benchmark indices failed to capitalize on the gap-up opening while managing to remain positive and closed above the key level of 23,800 in a possible bullish signal, said Satish Chandra Aluri of Lemon Markets Desk.

“We continue to believe that markets are entering a new macro regime in 2025, with rising uncertainty over inflation and growth leading to longer-term interest rates in the US. Expectations for the budget, earnings season and Trump’s upcoming inauguration The trigger will be the direction of the market in the new year,” he said.

Stocks Showing Bullish Bias:

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on counters of Ajanta Pharma, Jyoti Labs, Sapphire Foods, Home First Finance, Avenue Supermart and Eicher Motors.

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 counters of BLS International Services, Varroc Engineering, Lemon Tree Hotels, Aptus Value Housing Finance, AstraZeneca and Raymond. A bearish crossover on MACD on these counters indicates that they have started their downward journey.

Most active stocks by value:

Amber Enterprises (Rs 1,381 crore), Tata Motors (Rs 1,198 crore), Finolex Industries (Rs 1,123 crore), SBI (Rs 858 crore), RIL (Rs 856 crore), ITC (Rs 780 crore) , and Infosys (Rs 752 crore) crore) were among 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: 18.1 crore), Finolex Industries (Shares traded: 4.3 crore), Yes Bank (Shares traded: 4.3 crore), NMDC (Shares traded: 3.3 crore), Easy Trip Planners (Shares traded: 2.9 crore), RBL Bank (shares traded: 2.2 crore), and Suzlon Energy in the session on NSE (shares traded: 2 crore) were the most traded stocks among other stocks.

Stocks showing interest in buying:

Shares of Caplin Point, Jubilant Food and Oberoi Realty saw strong buying interest from market participants as they scaled their fresh 52-week highs, indicating bullish sentiment.

Selling Pressure in Stocks:

Shares of P&G, Astral, Godrej Consumer Products and Motherson Sumi Wiring touched their 52-week lows, signaling bearish sentiment on the counter.

Sentiment Meter Bear:

Overall, market breadth favored the bears as 1,864 stocks ended in the green, while 2,108 names settled in the red.

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