Ahead of Market: 12 things that will decide stock action on Friday

NEW DELHI: On Thursday, Nifty attempted to stretch beyond the upper end of the rising channel on the hourly chart, but the bears duly restricted the subsequent up-move and pushed it down.

Analysts said the Bearish Flag formation on the hourly chart now remains valid. “The index is now set to tumble towards the lower end of the pattern, which exists near the 9,000-8,970 zone,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan.

Axis Securities said Bank Nifty has seen an increase in Open Interest of 7.61 per cent with a decrease in price by 6.31 per cent, indicating short buildup. Nifty, too, has seen a 3.30 per cent increase in Open Interest along with a 0.84 per cent drop in price, indicating short buildup.

Shrikant Chouhan of Kotak Securities said technically, the 9,025 level should act as a trend decider in the next few sessions, above which one can expect the uptrend to continue up to 9150-9250 levels. However, a slip below 9,025 level could possibly open another correction till 8,880 level.

That said, here’s a look at what some of the key indicators are suggesting for Friday’s market action:

US shares flat amid trade tensions

The S&P 500 index was largely unchanged on Thursday as growing U.S.-China trade tensions and concerns about a rebound from a coronavirus-led economic slump were offset by an upbeat outlook from retailer TJX. At 7:30 pm (IST), the Dow Jones Industrial Average was up 50.65 points, or 0.21 per cent, at 24,626.55, the S&P 500 was down 0.36 points, or 0.01 per cent, at 2,971.25, and the Nasdaq Composite was down 14.41 points, or 0.15 per cent, at 9,361.37.

European shares fall on recovery doubts

European shares fell on Thursday following a strong run this week after the latest business activity data revealed the damaging impact of the coronavirus crisis. The pan-European STOXX 600 fell 1.0 per cent, retreating from its strongest close in three weeks, led by declines in travel and leisure, banks and technology stocks.

Tech chart signals bode ill for bulls
On Thursday Nifty50 reclaimed the 9,100 level, but formed a bearish candle on the daily chart that resembled a ‘Shooting Star’ pattern. This, along with the fact that the index is facing strong resistance near 20- and 50-day moving averages, does not bode well for the bulls, say analysts.

Check out the candle formations in the latest trading sessions

Nifty’s key hurdle at 9,150

The 9,150 level would be a crucial hurdle for Nifty now. If it manages to sustain above 9,150 level, then we may see a bounce towards the 9,300 – 9,350 zone. On the flipside, support is placed at 9,000 and then 8,888-8,800 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Thursday showed bullish trade setup on the counters of Indian Oil Corp, Birlasoft, Crompton Greaves, Minda Corporation, Praj Industries, ACC, Vikas WSP, Sonata Software, Global Vectra, Gujarat Gas, Kajaria Ceramics, Eicher Motors, Aarti Drugs, Sterling and Wilson and Jagran Prakashan among others

Stocks signalling weakness ahead

The MACD showed bearish signs on the counters of Bandhan Bank, Manappuram Finance, REC, Chennai Petroleum, Cochin Shipyard, Usha Martin, NIIT, GIC Housing, Den Networks, Cholamandalam Finance, Aegis Logistics, Gujarat Fluorochem, Ratnamani Metals, Ramky Infrastructure and Force Motors. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Reliance Industries (Rs 2608.78 crore) , HDFC Bank (Rs 2109.99 crore) , Bajaj Finance (Rs 2004.23 crore) , InterGlobe Aviation Ltd. (Rs 1452.06 crore) , ICICI Bank (Rs 1325.88 crore) , Bharti Airtel (Rs 1207.61 crore) , HDFC (Rs 1144.22 crore) , ITC (Rs 1075.75 crore) , SBI (Rs 941.00 crore) and Maruti Suzuki (Rs 935.21 crore) were among the most active stocks on Dalal Street on Thursday in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.

Most active stocks in volume terms
Vodafone Idea (Shares traded: 39.95 crore) , SBI (Shares traded: 6.11 crore) , ITC (Shares traded: 5.84 crore) , Bank of Baroda (Shares traded: 5.34 crore) , ICICI Bank (Shares traded: 4.31 crore) , Ashok Leyland (Shares traded: 4.25 crore) , BHEL (Shares traded: 4.22 crore) , Tata Motors (Shares traded: 3.73 crore) , Tata Power (Shares traded: 3.50 crore) and Hindalco Industries (Shares traded: 3.43 crore) were among the most traded stocks in the session.

Stocks seeing buying interest
India Cements, J B Chemical, Syngene International, Alembic Pharma and Aurobindo Pharma witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Thursday signalling bullish sentiment.

Stocks seeing selling pressure
Indiabulls Ventures, ABB India, TI Financial Holdings and PNB witnessed strong selling pressure in Thursday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours the bulls
Overall, market breadth remained in favour of bulls. As many as 293 stocks on the BSE 500 index settled the day in green, while 203 settled the day in red.

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Nifty50 on Thursday reclaimed the 9,100 level, but formed a bearish candle on the daily chart that resembled a ‘Shooting Star’ pattern. This, along with the fact that the index is facing strong resistance near 20- and 50-day moving averages, does not bode well for the bulls. Analysts said the 9,200 level would act as an immediate resistance for Nifty50.

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