Nagaraj Shetti of HDFC Securities said Nifty’s short-term trend appears to have reversed from the highs, but the market’s short-term trend status remains within the 12000-11650 level range.
“Strong follow-up weakness from here is not expected anytime soon, but there is a possibility of a bullish bounce emerging from here or from slightly lower levels. The crucial lower support is around the 11650- levels. 11600, “he said. .
Ajit Mishra of Religare Broking said that news of the increase in COVID cases in Europe and the United States is haunting markets around the world.
“Additionally, participants are expecting some clarity on the US stimulus package. Ahead of the US elections. In the midst of it all, domestic earnings announcements further increase volatility. We think it is prudent to hold positions. on both sides in equities despite the prevailing consolidation bias at Great, “he said.
Vinod Nair of Geojit Financial Services said Indian markets are undergoing a correction from the recent rally which has heavily influenced an uptrend in earnings growth due to positive second quarter results.
“Indian indices are expected to remain weak in the near term and will be driven by the trend of the current second quarter results and developments in the US. A major correction is unlikely to 11,500 as strong support for Nifty50, “he said.
With that said, here’s a look at what some of the key indicators for Tuesday’s action suggest:
US stocks fall as virus cases rise
US stocks fell sharply on Monday as rising coronavirus cases and a stalemate in Washington over the next fiscal aid bill cast a shadow over the economic outlook in the run-up to the Nov.3 presidential election. The Dow Jones Industrial Average fell 651.31 points, or 2.30%, to 27,684.12, the S&P 500 Index lost 65.08 points, or 1.90%, to 3,399.47 and the Nasdaq Composite Index lost 173, 94 points, or 1.53%, to 11,375.16.
Coronavirus restrictions, SAP crash hits European stocks
European stocks fell on Monday as Italy and Spain imposed new restrictions to control a resurgence in coronavirus cases, while shares in German heavyweight SAP slumped after it cut its 2020 outlook. The pan-European STOXX 600 Index fell by 0.5% and the euro zone’s top-line index slumped 1.4%, with risk appetite sapped globally by concerns about slow progress on a new US stimulus bill and impending presidential elections.
Tech view: nifty long bearish candle shapes
After forming indecisive candles in the last two sessions, Nifty50 finally showed signs of weakness on Monday. The index formed a long bearish candle on the daily chart, broke its crucial resistance at the 11,800-11,780 range, showed signs of weakness in the momentum indicators, and is now looking at the prospect of a further decline. Analysts said there is a good chance the index will test the 11,650-600 range in the coming days.
See the candlestick formations in the last trading sessions
ETMarkets.com
F&O: VIX sees a spike
India’s VIX rose 4.6 percent from 21.82 to 22.83 levels. Volatility needs to cool below the 20 level for the market to stabilize and control any spikes due to the US elections. The options data suggested a wider trading range between 11,500 and 12,000 levels.
Stocks showing bullish bias
The Momentum Moving Average Convergence Divergence (MACD) indicator showed a bullish trading setup on Monday on the counters of Tata Motors, HDFC Life Insurance, Firstsource Solution, Central Bank, V-Guard Industries, Texmo Pipes, NIIT, Mold-Tek Technologies, Birla Corporation, Prime Focus, Deepak Fertilizers, Geojit Financial, Mahindra CIE Auto, Tera Software, Sical Logistics, Gulf Oil Lubricants, Usha Martin, JTEKT India, Zydus Wellness, Adhunik Industries, KDDL, Orient Press, Zenith Exports and Naga Dhunseri Group, among others.
Stocks signal weakness ahead
MACD showed bearish signs at the counters of IDFC First Bank, Manappuram Finance, Bandhan Bank, Bajaj Auto, Jain Irrigation, Asian Paints, The Ramco Cements, Gayatri Projects, Siemens, Pidilite Industries, Gujarat Pipavav Port, Praj Industries, Balaji Amines, Quess Corp, Hercules Hoists, Shakti Pumps, Bal Pharma, GNA Axles, Nath Bio-Genes, Vishwaraj Sugar Industries, Johnson Controls-Hit, Banaras Beads, and Summit Securities, among others.
Most active stocks on Monday
RIL (Rs 3535.29 crore), Coforge Ltd. (Rs 1412.83 crore), Hero MotoCorp (Rs 1233.03 crore), Tata Motors (Rs 1199.33 crore), HDFC Bank (Rs 1196.06 crore), Bajaj Finance (Rs 1161.28 crore), Kotak Bank (Rs 1115.47 crore), Maruti Suzuki (Rs 1099.38 crore), IndusInd Bank (Rs 1083.66 crore) and HDFC (Rs 1019.31 crore) were among the most active stocks on Dalal Street on Monday in terms of value.
Most active stocks on Monday in terms of volume:
YES Bank (shares traded: 18.75 crore), Reliance Power (shares traded: 13.68 crore), Vodafone Idea (shares traded: 9.24 crore), Tata Motors (shares traded: 8.85 crore), Suzlon Energy (shares traded: 5.18 crore), Vedanta (shares traded: 4.66 crore), SBI (shares traded: 4.54 crore), Ashok Leyland (shares traded: 4.25 crore), NTPC (shares traded: 3 , 47 crore) and Bank of Baroda (shares traded: 3.35 crore) were among the most traded stocks in the session.
Shares that see buying interest
Thyrocare Technologies, Ceat, Century Plyboards, MCX India and APL Apollo Tube all 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
Archidply Decor, Mittal LifeStyle, Sintercom India, Hemisphere Properties India and WABCO India witnessed strong 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 105 stocks in the BSE 500 index settled on the day in green, while 391 settled on the day in red.
Podcast: What’s Next for the Market After Manic Monday? >>>
Strong sales at Reliance Industries alone wiped out nearly 250 points from the Sensex today. Private lenders include HDFC Bank, ICICI Bank and Axis Bank further dragged the 30-share index down by around 200 points. Sensex closed the day with a loss of 540 points to close at 40,145.40 points, while Nifty closed at 11,767.75 points. We spoke to Mayuresh Joshi, Head of Equity Research, William O’Neil India, to understand her views on what to expect in the market.
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