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

India’s benchmark equity indices Sensex and Nifty swung between gains and losses before ending flat on Tuesday, as profit booking, particularly in energy stocks, offset gains in information technology companies.

The Nifty 50 index fell 0.05% to 25,796.9, while the S&P BSE Sensex settled down 0.04% to 84,266.29. They moved between 0.1% higher and 0.1% lower during the session.

Meanwhile, Thursday’s trade is expected to be affected after Iran’s ballistic missile strike on Israel heightened fears of a wider regional conflict. Crude oil prices rose amid concerns about possible supply disruptions. Over the past two days, Brent futures and US West Texas Intermediate (WTI) crude have both jumped more than 6%.

Here’s how analysts pulse the market:

“Nifty formed a doji pattern with a long upper shadow on the daily chart, indicating market uncertainty. Heavy call writing at 25800 suggests that it may act as strong resistance if sustained. Immediate support lies at 25750, And a critical break below that could push the index above 25,600/25,500, a move above 25,800 could take the Nifty to 26,050, where sellers could become active again,” said Rupak De of LKP Securities.

Tejas Shah of JM Financial and BlinkX said, “Technically, the Nifty has been closing below the psychological level of 26,000 for two consecutive days which has been acting as marginal support for the past two days. While this is a negative development it is nothing. Which is a big one. On the downside the index should now find support around the next major support zone of 25,650-700 and there support is now seen at 25,650-700.On the -500 upside, the immediate psychological resistance is at 26,125-150 and Nifty at 25,700 – 26,000. Likely to consolidate or remain volatile in the near range.”

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

US Market:

European share:

Tech View:

After opening on a positive note, the Nifty tried to move higher immediately after the opening. It later failed to sustain the early gains and slipped into weakness with a pessimistic move. A minor upside recovery in the middle was not successful.

A small candle was formed with an upper shadow on the daily chart. Technically, this pattern indicates a bullish opportunity in the market. But, strong follow-through selling momentum was absent on Tuesday, said Nagaraj Shetty of HDFC Securities.

In open interest (OI) data, the highest OI was seen at 25,900 and 25,800 strike prices on the call side, while on the put side, the highest OI was seen at 25,800 strike price followed by 25,700.

Stocks Showing Bullish Bias:

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on counters of Kfin Technologies, Paytm, Blue Dart, Bayer CropScience, Balaji Amines and Metropolis Healthcare.

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 Dixon Technologies, Bikaji Foods International, Mankind Pharma, Century Plyboards, Canes Technology and Jio Financial Services. A bearish crossover on MACD on these counters indicates that they have started their downward journey.

Most active stocks by value:

RIL (Rs 2,414 crore), HDFC Bank (Rs 2,120 crore), Nalco (Rs 1,569 crore), Paytm, (Rs 1,513 crore), ICICI Bank (Rs 1,397 crore), BSE (Rs 1,388 crore) , and Axis Bank (Rs 1,375 crore) are 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:

Shree Renuka Sugars (shares traded: 13 crore), PNB (shares traded: 12 crore), Nalco (shares traded: 7 crore), Yes Bank (shares traded: 6.1 crore), Tata Steel (shares traded: 5 crore), Alok Industries (shares traded: 4 crore), and Easy Trip Planners (shares traded: 3.6 crore) among others were among the most traded stocks of the session on NSE.

Stocks showing interest in buying:

Shares of BASF India, Saregama India, Nalco, Indegene, Polycab India, Balrampur Chinese and Deepak Fertilizers saw strong buying interest from market participants as they scaled their fresh 52-week highs, indicating bullish sentiment.

Selling Pressure in Stocks:

Shares of RBL Bank touched their 52-week low, indicating bearish sentiment on the counter.

Sentiment Meter Bulls:

Overall, market breadth favored the bulls as 2,240 stocks ended in the green, while 1,743 names settled in the red.

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