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

Domestic equity markets closed higher on Tuesday, led by financials and IT stocks, as rising expectations of an aggressive rate cut by the US Federal Reserve in September boosted sentiment and fueled a global equity rally.

The NSE Nifty 50 index rose 0.51% to 24,698, while the S&P BSE Sensex gained 0.47% to close at 80,802.

Investors are now focusing on the minutes of the Fed’s latest policy meeting later this week and Fed Chair Powell’s upcoming address, looking for clues on the path to a US rate cut.

Here’s how analysts read the pulse of the market:
“The Nifty filled the first gap barrier and formed a bullish candle on the daily scale, indicating strength. On the downside, the 21-day Exponential Moving Average (DEMA), located near 24,410, will serve as strong support in the short term. As long as the index remains above 24,400 The bullish momentum is expected to continue until the next gap barrier is placed near 24,960, which will act as the first resistance for the index, followed by the previous all-time high around 25,080.”, Hrishikesh Yedve, Asit C. Mehta Investment Intermediates said.

Tejas Shah of JM Financial & BlinkX said, “The technical framework of Nifty is relatively stronger than that of Bank Nifty. We believe that bullishness is likely to continue as long as Nifty holds above 24,400 and may test the next resistance of 24,850.” .The upside support for the index is now seen at 24,350-24,400 levels, the immediate resistance for the Nifty is at 25,000.”

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

US Market:

US stocks opened slightly lower on Tuesday as traders took profits and awaited a keynote speech by Federal Reserve Chairman Jerome Powell later in the week. Shortly after the open, the Dow Jones was down 0.1% at 40,974, the S&P 500 was also down 0.1% at 5,626, and the Nasdaq Composite was down 0.2% at 19,813, following a 1.4% gain the previous day.

Tech View: Small positive candle
The Nifty ended near 24,700-level with a gain of 126 points and formed a small positive candlestick with a small upper shadow on the daily chart.

The underlying trend of Nifty remains positive. A sustained move above the barrier of 24700 level could open the next upside target of 25000-25100 in the near term. Nagaraj Shetty of HDFC Securities said immediate support is at 24500 level.

The open interest (OI) data showed the highest OI on the call side at 24,900 and 25,000 strike price, while on the put side, it was centered at 24,500 strike price.

Stocks Showing Bullish Bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on counters of Bengal and Assam Company, TCS, Shriram Finance, Caplin Point Laboratories, Sansera Engineering, Awfis Space Solutions and Mphasis.

MACD is known for signaling trend reversals in traded securities or indices. When the 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 BASF India, IFB Industries, Jubilant Ingravia and Windlass Biotech. A bearish crossover on MACD on these counters indicates that they have started their downward journey.

Most active stocks by value:
Angel One (Rs 3,831 crore), Zomato (Rs 3,455 crore), Mazagon Dock Ship (Rs 2,754 crore), HDFC Bank (Rs 2,551 crore), Bharti Airtel (Rs 1,460 crore), RIL (Rs 1,260 crore), and ICICI Bank (Rs 1,231 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: 30.9 crore), Zomato (shares traded: 13.2 crore), Yes Bank (shares traded: 8.7 crore), Allcargo Logistics (shares traded: 6.6 crore), Suzlon Energy (shares traded: 5.4 crore), HFCL (Shares traded: 4.9 crore), and Tata Steel (Shares traded: 3.7 crore) among others were among the most traded stocks of the session on NSE.

Stocks showing interest in buying:
Shares of Godfrey Phillips, Balrampur Chinese, Vijaya Diagnostic, ICICI Securities, UTI AMC, Bombay Burmah and Praj Industries witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, indicating bullish sentiment. .

Selling Pressure in Stocks:
No major stocks touched their 52-week lows on Tuesday.

The sentiment meter favors the bulls:
Overall, market breadth favored the bulls as 2,371 stocks ended in the green, while 1,561 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)