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

NEW DELHI: Nifty ended flat amid volatile trade on Tuesday and in the process formed a bearish candle on the daily chart. Analysts said the index managed to hold on to the 10,300 mark, but is still in a consolidation phase. It needs to break the 10,200 level or cross 10,450 for a directional trade to emerge.

Sumeet Bagadia of Choice Broking said the index has support at 10,100 level while resistance comes in at 10,500 level.

Chandan Taparia of Motilal Oswal Financial Services said Nifty has to hold above 10,333 level to witness an up-move towards 10,400 and then 10,555 levels, while on the downside the immediate support is seen in the 10,200-10,180 zone.

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

US shares subdued on virus fears

The S&P 500 and Dow Jones indexes were muted at the open on Tuesday as coronavirus-related worries and simmering US-China tensions weighed on sentiment at the end of what is expected to be the S&P 500’s best quarter since 1998. At 7:11 pm (IST), the Dow Jones Industrial Average was down 48.89 points, or 0.19 per cent, at 25,546.91, the S&P 500 was up 5.98 points, or 0.20 per cent, at 3,059.22, and the Nasdaq Composite was up 42.80 points, or 0.43 per cent, at 9,916.96.

European shares lifted by Asian markets

European shares picked up on Tuesday after a weak start, extending the optimism of the Asian session, and oil prices steadied as investors looked for signs of an economic recovery in the second half of 2020. The MSCI world equity index, which tracks shares in 49 countries, was up about 0.1 per cent at 1056 GMT, after Asian shares rose on strong data from the US housing market and Chinese factories. European shares continued the rally.

Tech View: Nifty forms small bearish candle

Nifty50 on Tuesday erased morning gains to close flat. The index formed a small bearish candle on the daily chart after forming indecisive Doji candles for two consecutive sessions. Analysts said the index is losing strength and the bias has turned negative. Nifty has immediate support at 10,190 and 10,180 levels, while the immediate hurdle is seen at 10,400 level, they said.

Check out the candlestick formations in the latest trading sessions



F&O: Low level of VIX backs bullish stance

India VIX moved up marginally by 0.72 per cent to 29.11 level. However, overall lower volatility suggests a bullish stance and emergence of multiple supports at every decline. On the options front, maximum Put open interest stood at 10,000 followed by 9,000 levels, while maximum Call OI was at 11,500 followed by strike price 11,000. There was Call writing at strike price 11,000 and 10,500 while Put writing is seen at strike prices 10,000 and 9,500. Options data suggested a wider trading range between 9,800 and 10,800 levels.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of Jindal Steel & Power, Escorts, ACC, Rites, Sonata Software, Britannia Industries, Mayur Uniquoters, Talbros Auto, Tanla Solutions, AksharChem (India), Oriental Aromatics, Kamat Hotels, Energy Development, Blue Dart Express, Kewal Kiran Clothing, Cambridge Technology and Summit Securities.

Stocks signalling weakness ahead

The MACD showed bearish signs on the counters of SBI, IDFC First Bank, Coal India, HPCL, IFCI, Manappuram Finance, Bharat Petroleum, Rail Vikas Nigam, LT Foods, Bank of India, Network 18 Media, Laurus Labs, Bank of Maharashtra, Berger Paints, Muthoot Finance, Phillips Carbon, Hathway Cable & Data, Welspun Corp, PTC India Financial, Apollo Hospitals, Rain Industries, NCL Industries, Nectar Lifesciences, Birla Corporation, Gujarat Narmada Valley, Strides Pharma Science, Tin Plate, Mindtree, Patel Engg, Radico Khaitan, Lasa Supergenerics, DCW, PNB Housing Finance, Gujarat Pipavav Port, Triveni, Dishman Carbogen Amc, Manali Petrochem and Himatsingka Seid, among others.

Most active stocks in value terms

Bajaj Finance (Rs 2782.99 crore) , RIL (Rs 2400.36 crore) , HDFC Bank (Rs 1908.86 crore) , ICICI Bank (Rs 1670.86 crore) , Maruti Suzuki (Rs 1170.37 crore) , HDFC (Rs 1120.23 crore) , Axis Bank (Rs 1102.64 crore) , Vodafone Idea (Rs 960.00 crore) , IndusInd Bank (Rs 840.99 crore) and ITC (Rs 808.24 crore) were among the most active stocks on Dalal Street on Tuesday 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: 88.48 crore) , BHEL (Shares traded: 8.12 crore) , BEL (Shares traded: 6.22 crore) , Ashok Leyland (Shares traded: 6.17 crore) , Tata Motors (Shares traded: 5.08 crore) , SAIL (Shares traded: 4.86 crore) , ICICI Bank (Shares traded: 4.75 crore) , SBI (Shares traded: 4.36 crore) , Lemon Tree Hotels (Shares traded: 4.27 crore) and ITC (Shares traded: 4.12 crore) were among the most traded stocks in the session.

Stocks seeing buying interest

IDBI Bank, Alok Industries, Gujarat Gas, FDC and Tata Communications witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.


Stocks seeing selling pressure


B.C. Power Controls, Omaxe and Rajesh Exports witnessed strong selling pressure in Tuesday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bears

Overall, market breadth remained in favour of bears. As many as 188 stocks on the BSE 500 index settled the day in green, while 309 settled the day in red.

Podcast: Why did Nifty give up the gains on Tuesday? >>>

Sensex shed nearly 46 points on Tuesday to end at 34,916, while Nifty settled 10 points lower at 10,302. Smallcaps underperformed their midcap and largecap peers. Sectorally, while BSE oil & gas, telecom and healthcare indices declined over 1 per cent each, auto and consumer discretionary indices and Bankex ended in the green.

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