Ahead of the market: 10 things that will determine stock action on Monday

Domestic benchmark equity indices fell on Friday, ending the week in the red, on worries about lackluster corporate earnings and continued foreign inflows in information technology stocks after an expected interest rate cut by the US Federal Reserve.

The NSE Nifty 50 fell 0.21% to 24,148, while the BSE Sensex fell 0.07% to 79,486. They fell 0.64% and 0.3% respectively this week, posting their fifth weekly loss in six.

Here’s how analysts pulse the market:

“The level of 24,000 is expected to act as a strong support for the index. If it stays above this level, Nifty bulls may still get a chance to gain momentum. However, a break below 24,000 may weaken the market further. RSI indicator A positive crossover, indicating that the short-term momentum is likely to remain strong, could see the index recover towards 24,500 A fall below 24,000 could lead to a market correction,” said Rupak De of LKP Securities.

Sharekhan’s Jatin Gedia said, “On the daily chart we can observe that the Nifty is in the process of retracing the rally from 23800 to 24500. It is currently trading around the 61.82% Fibonacci retracement level (24090) which is likely. Support and A break below 23970 could lead to a weakening structure to provide holding is likely.”

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

US Market:

The S&P 500 briefly surpassed the 6,000 mark and closed with its biggest weekly percentage gain in a year, as Donald Trump’s election victory and a possible Republican victory in Congress fueled expectations of favorable business policies.

A widely expected 25 basis point interest rate cut by the Federal Reserve on Thursday also supported stocks this week.

The S&P 500 and Dow Industrials posted their best weekly percentage gains since early November 2023, while the Nasdaq posted its best week in two months and its second-best week of 2024. was noted.

European share:

Europe’s benchmark STOXX 600 began its third straight week of declines on Friday, as China’s tapering stimulus measures as well as worries about tariffs under the Trump presidency hurt economic growth.

The pan-European STOXX 600 closed down 0.6%, with China-exposed sectors such as miners and luxury losing more than 3% each. Most of the major sub-sectors were in the red barring defensive sectors like real estate and healthcare.

Take View: Small negative candlestick

A small negative candlestick with a small lower shadow formed on the daily chart of Nifty. Technically, this market action signals a bearish market. After a sharp decline near the hurdle of 24,500 level, further consolidation movement can be expected in the short term.

The short-term trend of Nifty continues to be volatile and this consolidation is likely to continue till the next session. The next lower support is around the 23,800 level. Nagaraj Shetty of HDFC Securities said the immediate resistance is placed at the 24,250 level.

In open interest (OI) data, the highest OI was seen at 24,200 and 24,300 strike prices on the call side, while on the put side, the highest OI was seen at 24,000 strike price followed by 24,100.

Stocks Showing Bullish Bias:

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on counters of Indian Hotels, Motisons Jewellers, Bharat Global Developers and Vardhaman Holdings.

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 Radico Khaitan, Suven Pharma, Abbott India, ICICI Bank and Vishnu Prakash R Punglia. A bearish crossover on MACD on these counters indicates that they have started their downward journey.

Most active stocks by value:

ITI (Rs 2,684 crore), RIL (Rs 2,544 crore), SBI (Rs 2,216 crore), Indian Hotels (Rs 1,906 crore), Paytm (Rs 1,853 crore), HDFC Bank (Rs 1,746 crore), and Trent (Rs 1,602 crore) were among the other 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: 31.1 crore), ITI (Shares traded: 9 crore), Suzlon Energy (Shares traded: 8.6 crore), Tata Steel (Shares traded: 6.1 crore), Yes Bank (Shares traded: 5 crore), Zomato (shares traded: 4.8 crore), and SAIL (shares traded: 4.7 crore) were among the other most traded stocks of the session on NSE. Among them are included.

Stocks showing interest in buying:

Shares including Vijaya Diagnostic, Indian Hotels, Page Industries, CoForge, Federal Bank, NetWeb Technologies and Nalco saw strong buying interest from market participants as they scaled their fresh 52-week highs, indicating bullish sentiment.

Selling Pressure in Stocks:

Shares of Aarti Industries and Delhivery hit 52-week lows, signaling bearish sentiment on the counter.

Sentiment Meter Bear:

Overall, market breadth favored the bears as 2,635 stocks ended in the red, while 1,346 names settled in the green.

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