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

Indian benchmark equity indices closed higher on Monday, led by banking and IT stocks. The Sensex rose 591 points or 0.73% to close at 81,973, while the Nifty gained 164 points or 0.66% to close at 25,128.

Meanwhile, Tuesday’s trade may see little impact as India’s retail inflation rose to a nine-month high of 5.49% on a year-on-year basis in September due to a sustained rise in vegetable prices and a lower year-on-year base. This is higher than the 5-year low of 3.65% recorded last month and marks the first time since July that it has surpassed the Reserve Bank of India’s (RBI) medium-term target of 4%.

Here’s how analysts read the pulse of the market:
“On the daily chart, we can observe that Nifty has resumed its rise towards 25500 after three days of brief consolidation. The hourly momentum indicator has a positive crossover which is a buy signal. Thus, we expect the positive momentum to continue. 25234 – Next few trading sessions towards 25360. Support base shifts higher towards 24920,” said Sherkhan’s Jatin Gedia.

Tejas Shah of JM Financial & BlinkX said, “The candlestick pattern formed on the daily chart is encouraging. On the upside, the 25,250 – 25,300 zone remains an important barrier and the market needs to cross this on a closing basis. Any major strength for the Nifty now 25,000 and seen at 24,750-800.

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

US Market:
Wall Street rose on Monday, with the S&P 500 and Dow hitting new intraday record highs as investors braced for a week full of corporate earnings and key economic data that could challenge elevated stock market valuations. Chip stocks led gains on the S&P 500 and Nasdaq, with the benchmark index building to its record close on Friday after major banks started the third-quarter earnings season on a positive note. An index of semiconductor companies rose 1.5% to a two-month high, led by a 2.5% gain in Nvidia. Other growth stocks such as Apple and Microsoft rose 1.1% and 0.9%, respectively, while energy shares fell 0.2% after oil prices fell.

European share:
European stocks closed Monday’s volatile session at two-week highs as investors looked ahead to corporate earnings later this week and the European Central Bank’s policy decision, although caution lingered after China’s weekly stimulus announcements fell short of expectations.

The continent-wide STOXX 600 index ended 0.48% higher, with the technology, defense and utilities sectors each gaining more than 1.2%.

France’s main index lagged other major markets after credit rating agency Fitch downgraded the country’s outlook to “negative” from “stable” on Friday.

Tech View: Long bull candle
A long bull candle was formed on the daily chart of Nifty, indicating an upside breakout attempt of small range movement. After moving into a broad higher low range of 25,200-24,700 levels in the last 3-4 sessions. The index has bounced back and is now nearing the range above the 25,200 level.

A sustained move above the range above 25,200 levels can be considered as an upside breakout of the key hurdle and may pull the Nifty towards the next resistance of 25,500-25,600 levels in the near term. Nagaraj Shetty of HDFC Securities said immediate support is provided at the 24,900 level.

In open interest (OI) data, the highest OI on the call side was seen at 25,200 and 25,300 strike prices, while on the put side, the highest OI was seen at 25,000 strike price followed by 25,100.

Stocks Showing Bullish Bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on counters of Gujarat Fluorochemicals, Newland Laboratories, Mankind Pharma, Wa Tech Wabag, Angel One and ZF Steering Gear.

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 Paytm, Balrampur Chinese Mills, Saregama, Five-Star Business Finance and Vedanta. A bearish crossover on MACD on these counters indicates that they have started their downward journey.

Most active stocks by value:
BSE (Rs 6,074 crore), CDSL (Rs 2,844 crore), Avenue Supermart (Rs 2,050 crore), RIL (Rs 1,678 crore), HDFC Bank (Rs 1,558 crore), ICICI Bank (Rs 1,458 crore) , and Zomato (Rs 1,273 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:
JP Power (shares traded: 9.8 crore), Yes Bank (shares traded: 5.6 crore), Zomato (shares traded: 4.5 crore), Easy Trip Planners (shares traded: 3.7 crore), Bandhan Bank (shares traded: 3.6 crore), The session on NSE included Tata Steel (Shares traded: 3.5 crore), and Nalco (Shares traded: 3.3 crore).

Stocks showing interest in buying:
Shares including Aptus Value Holding Finance, BSE, Oberoi Realty, Tech Mahindra, Persistent Systems, Motilal Oswal and Anant Raj saw strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment. gives

Selling Pressure in Stocks:
Shares of CreditAccess Grameen hit their 52-week low, signaling bearish sentiment over the counter.

Sentiment Meter Bulls:
Overall, market breadth favored the bulls as 2,069 stocks ended in the green, while 1,972 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)