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

Indian benchmark indices Nifty 50 and Sensex closed lower on Monday as weak earnings and renewed profit booking offset a post-results rally in top private lender HDFC Bank.

The Nifty50 fell 0.29% to 24,781, while the BSE Sensex closed down 0.09% to 81,151. Both indexes fluctuated between early gains of about 0.4% and midday declines of about 0.7%, before a partial recovery.

Here’s how analysts read the pulse of the market:

“The Nifty remained volatile throughout the day as traders were uncertain about the direction of the market. At the higher end, it found resistance at the 50EMA on the daily time frame. Further, the index failed to move beyond 25000, leading to increased selling pressure. If the Nifty closes at 24700 If it goes lower, selling pressure may intensify, however, if it holds above 24700, a smart recovery towards 25050 is expected,” said Rupak De of LKP Securities.

Sharekhan’s Jatin Gedia said, “Nifty saw selling pressure from 25000 mark, showing resistance with high concentration of open interest on call side. Last week’s good defense on downside of 20-week average (24730) is being tested. Again, a barrier between bulls and bears has emerged, which we expect to see rangebound price action from a short-term perspective in the overall 24500 – 25200 range.”

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

US Market:

Wall Street stocks were slightly lower early Monday as major indexes retreated from record highs in anticipation of a busy earnings week featuring Tesla and Boeing. Meanwhile, China’s central bank announced two key interest rate cuts to boost the economy, bringing them to historic lows.

Boeing shares jumped nearly five percent after labor negotiators reached an agreement to present a new contract to 33,000 workers in the Seattle area, potentially ending a months-long machinists union strike.

European share:

Europe’s STOXX 600 index fell 0.6% ahead of results from German giant SAP, which could weigh on a busy earnings week on both sides of the Atlantic.

The British pound and the euro each fell about 0.2% against the dollar, while the US dollar breached the 150 mark against the yen, which was up 0.25% for the day.

Tech View:

A small fair candle with a small lower shadow was formed on the daily chart. Technically this pattern indicates a lack of strength in the market to show a sustained upside bounce. The market is still in a broad high-low range for the past few weeks.

The underlying trend of Nifty has been weak amid range movement. Failing to sustain the recent upside bounce, the market may revert to the lower range of 24,600-24,500 levels in the near term. Nagaraj Shetty of HDFC Securities said the immediate resistance is at the 25,000 level.

In open interest (OI) data, the highest OI was seen at 24,900 and 24,800 strike prices on the call side, while on the put side, the highest OI was seen at 24,700 strike price followed by 24,500.

Stocks Showing Bullish Bias:

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on counters of Olectra Greentech, Tata Chemicals, Heritage Foods, Aster DM Healthcare and HDFC Bank.

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 Apar Industries, Shakti Pumps, Persistent Systems, OFSS, Pratap Snacks, Whirlpool of India and Symphony. A bearish crossover on MACD on these counters indicates that they have started their downward journey.

Most active stocks by value:

HDFC Bank (Rs. 4,033 crore), Amber Enterprises (Rs. 2,784 crore), Kotak Bank (Rs. 2,342 crore), Mazagon Dock Ship (Rs. 2,327 crore), Zomato (Rs. 2,303 crore), Tata Chemicals (Rs. 2,275 crore), and Bajaj Auto (Rs 2,186 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:

Zomato (shares traded: 8.8 crore), Yes Bank (shares traded: 6.7 crore), RBL Bank (shares traded: 6.3 crore), JM Financial (shares traded: 5.6 crore), JP Power (shares traded: 5.3 crore), Manappuram Finance (shares traded: 3 crore), and IDFC First Bank (shares traded: 2.7 crore) among others were among the most traded stocks of the session on NSE.

Stocks showing buying interest:

Shares of Amber Enterprises, Suven Pharma, Netweb Technologies, MCX, Tech Mahindra, Dixon Technologies and Aditya Birla Real Estate saw strong buying interest from market participants as they scaled their fresh 52-week highs, indicating bullish sentiment. is

Selling Pressure in Stocks:

Shares of Ujjivan Small Finance Bank, RBL Bank, IndusInd Bank, J&K Bank, IDFC First Bank, Equitas Small Finance Bank and CreditAccess Grami hit their 52-week lows, indicating bearish sentiment on the counter.

Sentiment Meter Bear:

Overall, market breadth favored the bears as 1,102 stocks ended in the green, while 2,948 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)