Chandan Taparia of Motilal Oswal Financial Services said that Nifty has broken an immediate support trend line by connecting all recent lows, which does not bode well for the bulls from a short-term point of view.
“Now, until it remains below 11550 zones, you could see a further decrease in the profit reserve towards zones 11200 and 11111, while on the upside you see key obstacles in zones 11650 and 11750,” he said.
HDFC Securities’ Nagaraj Shetti said Nifty’s short-term trend appears to have reversed and follow-up weakness is expected to confirm this reversal pattern.
“We expect an opportunity to sell to the upside on any attempted bullish bounce around the 11450-11500 levels. Further weakness can be expected in the near term and the next lower levels will be seen at 11100-11000,” he said.
Angel Broking’s Aamar Deo Singh said that overall today’s high should act as a key resistance going forward with support for Nifty seen around the 11200-11300 zone.
Vinod Nair of Geojit Financial Services said that rising geopolitical tensions could affect market behavior in the coming days, so investors are advised to be cautious.
With that said, here’s a look at what some of the key indicators suggest for Tuesday’s action:
India’s GDP experiences its first contraction in more than 40 years
The country’s GDP contracted 23.9 percent more than expected in the June quarter, the worst in more than 40 years. Economists believe that the recovery of economic growth in India will be slower than previous expectations.
U.S. stocks point to best August in 36 years
The S&P 500 held near record highs Monday as bets on an economic revival due to prolonged central bank support put the index in the course of its best August in decades. The Dow Jones Industrial Average was down 139.46 points, or 0.49%, to 28,514.41, the S&P 500 was down 3.65 points, or 0.10%, to 3,504.36. The Nasdaq Composite was up 35.35 points, or 0.30%, to 11,730.98.
European stocks rise on oil gains
European stocks rose on Monday as heavyweight oil and gas players were supported by rising crude prices and merger talks at major French power companies saw the sector outperform its regional peers. The pan-European STOXX 600 Index rose 0.5%, adding to the slight gains from the previous week amid some optimism about COVID-19 treatments. It seemed likely that a UK market holiday would keep trading volumes low during the day.
Tech Vision: Big Reversal of Bearish Candlestick Signals
Nifty50 on Monday saw a sell-off pressure around the 11,800 level, bringing the bears back into the game. A long bearish candle on the daily Nifty chart eclipsed all the high-low formations of the last six sessions. Analysts said the index’s short-term trend has turned negative and a follow-up sale on Tuesday could confirm a trend reversal.
See the candlestick formations in the last trading sessions
ETMarkets.com
F&O: Sharp decline in VIX suggests decline in earnings reserve
India’s VIX rose sharply due to new geopolitical tension and profit taking. India’s VIX rose 24.44 percent from 18.34 to 22.83. An increase in volatility from the lower levels indicates a decrease in the earnings reserve, but the lower VIX overall weekly may support the market at key levels after a few more declines. The options data suggested a wider trading range between 11,000 and 11,800 levels.
Stocks showing bullish bias
The Momentum Moving Average Convergence Divergence (MACD) indicator showed a bullish trading setup on Monday on the counters of East West Holdings, Danube Industries, Kamadgiri Fashion, Vadilal Enterprises and Fomento Resorts.
Stocks signal weakness ahead
MACD showed bearish signs on the counters of Sun Pharma, JSW Steel, REC, Power Grid, IDFC, Power Finance, Apollo Tires, Rail Vikas Nigam, Tech Mahindra, Indian Overseas Bank, Exide Industries, Glenmark Pharma, Engineers India, UCO Bank , HFCL, Piramal Enterprises, Bharat Forge, IFCI, TVS Motor, Jump Networks, HUDCO, Birlasoft, Rain Industries, Lakshmi Vilas Bank, Oil India, Balrampur Chini, Maruti Suzuki India, Voltas, Shree Renuka Sugars, CCL Products India, Welspun Enterprises , Quess Corp, Dolat Investment, Xchanging Solutions and Max Ventures among others.
Most active stocks on Monday
Bharti Airtel (Rs 9589.20 crore), RIL (Rs 6067.97 crore), IndusInd Bank (Rs 3740.14 crore), Bajaj Finance (Rs 3072.41 crore), ICICI Bank (Rs 2922.47 crore), Axis Bank (Rs 2820.49 crore), SBI (Rs ) 2630.21 crore), Tata Motors (Rs 2314.81 crore), HDFC Bank (Rs 2167.92 crore) and ITC (Rs 1868.31 crore) were among the most active stocks on Dalal Street on Monday in terms of value.
The most active stocks on Monday in terms of volume
Vodafone Idea (shares traded: 68.61 crore), YES Bank (shares traded: 24.45 crore), Bharti Airtel (shares traded: 18.67 crore), Tata Motors (shares traded: 16.05 crore), SBI ( shares traded: 11.99 crore), BHEL (shares traded: 10.89 crore), Future Retail (shares traded: 10.53 crore), ITC (shares traded: 9.70 crore), ONGC (shares traded: 9, 31 crore) and Federal Bank (stocks traded: 8.99 crore) were among the most traded stocks in the session.
Shares that see buying interest
Mindtree, Larsen & Toubro Infotech, Adani Green Energy, AstraZeneca and Timken India witnessed strong buying interest from market participants as they scaled their new 52-week highs on Monday, indicating bullish sentiment.
Stocks that see selling pressure
Blue Chip India, Max Healthcare Institute, Max India, and Madhav Copper all witnessed heavy selling pressure in Monday’s session and hit their 52-week lows, indicating bearish sentiment on these counters.
Sentiment meter favors bears
Overall, the broad market remained in favor of the bears. Up to 25 stocks from the BSE 500 index settled on the day in green, while 475 settled on the day in red.
Podcast: Is this a temporary change or a change in trend? >>>
Dalal Street reversed on Monday to end a six-session winning streak and lost nearly 1,382 points from the day’s high as new tensions on the India-China border sparked a widespread selloff. Shares of ICICI Bank, RIL, HDFC, Kotak Mahindra Bank and Infosys led the decline, while TCS and ONGC managed to settle in the green. Overall, Sensex lost 839 points to end the day at 38,628 while Nifty closed 260 points at 11,387. We caught up with Anand Rathi’s Narendra Solanki to try to understand the underlying current of the market.
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