NEW DELHI: As Nifty ended higher for the second straight session on Monday, it formed a long bullish candle on the daily chart.
Nagaraj Shetti of HDFC Securities said, the short-term trend of Nifty continues to be positive, and there is a possibility of some more upside or range bound movement in the next few sessions.
“The present upside bounce could stretch up to maximum 11,400-11,500 levels by this or next week, before showing next round of weakness from the highs. Immediate support is now placed at 11,050,” he said.
Vinod Nair of Geojit Financial Services said traders should limit overnight positions and keep booking profits while investors should follow an accumulation strategy.
Chandan Taparia of Motilal Oswal Financial Services said the index needs to hold above 11,111 zones to witness a further upmove towards 11,333 and then 11,450 zones while on the downside, major supports are seen at 11,000 then 10,880 levels.
That said here’s a look at what some of the key indicators are suggesting for Tuesday’s action:
US stocks rise as tech, bank shares gain
US stocks surged on Monday, bouncing back from the longest weekly losing streak in a year for the S&P 500 and the Dow, with technology, banks and travel shares leading the advance. The Dow Jones Industrial Average was up 352.90 points, or 1.30%, at 27,526.86 and the S&P 500 was up 38.95 points, or 1.18%, at 3,337.41. The Nasdaq Composite was up 122.90 points, or 1.13%, at 11,036.46.
China data, banks lift European shares
European stocks partially recovered from last week’s hefty losses on Monday, helped by upbeat industrial profits data from China and as banking stocks bounced off record lows. The pan-European STOXX 600 index rose 1.7% after last week’s 3.6% drop, with the banks index jumping 4.1%.
Tech View: Nifty takes out 50-day EMA
After reclaiming the 11,000 level in the previous trading session, NSE barometer Nifty50 on Monday cemented its gains by topping the 11,200 mark. The index broke above its 50 per cent Fibonacci retracement level of the previous decline, whose value is now placed at 11,210. Nifty also settled above its 50-day exponential moving average (EMA), indicating strengthening of the uptrend, said analysts, who believe a move above 11,250 level in the next session can push the index further higher.
Check out the candlestick formations in the latest trading sessions
ETMarkets.comF&O: Cooling VIX offers comfort
India VIX fell 5.36 per cent from 20.68 to 19.57 level, giving some comfort about the bounceback move. Options data suggested a wider trading range between 10,700 and 11,500 levels, while the immediate trading range lay between 11,000 and 11,400 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Monday showed bullish trade setup on the counters of Vedanta, NCC, Granules India, Cholamandalam Investment, Trident, Escorts, Manali Petrochem, Allcargo Logistics, Graphite India, Berger Paints, Thirumalai Chem, MCX, JK Tyre & Industries, FDC, Shree Digvijay, Zen Technologies, Rites, Lincoln Pharma, Gravita India, Kajaria Ceramics, Swan Energy, The Anup Engineering, Seamec, Pokarna, Cosmo Films, Matrimony.com, Albert David, IIFL Wealth, Krebs Biochemicals, Jindal Drilling, Sakar Healthcare, Asahi Songwon Colors, MPS, MRF, Aarvi Encon and Libas Designs among other.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Kretto Syscon, Cosco (India), Elgi Equipments, Oberoi Realty, NHC Foods, ISMT, Mishtann Foods, Bharat Bhushan Finance, Shardul Securities, Oceanaa Biotek Industries, Ashok Alco-Chem, Ador Multiproducts, CSL Finance, Adinath Exim and Visa Steel among others.
Monday’s most active stocks
RIL (Rs 2015.90 crore), Bajaj Finance (Rs 1838.30 crore), IndusInd Bank (Rs 1331.44 crore), Dr. Reddy’s Labs (Rs 1283.31 crore), TCS (Rs 1044.87 crore), PVR (Rs 1026.61 crore), HCL Tech (Rs 930.85 crore), Bharti Airtel (Rs 930.01 crore), Infosys (Rs 859.48 crore) and HDFC Bank (Rs 850.39 crore) were among the most active stocks on Dalal Street on Monday in value terms.
Monday’s most active stocks in volume terms
Vodafone Idea (shares traded: 41.39 crore), Ashok Leyland (shares traded: 7.93 crore), YES Bank (shares traded: 7.35 crore), Tata Motors (shares traded: 6.18 crore), BHEL (shares traded: 5.65 crore), Alok Industries (shares traded: 4.94 crore), SBI (shares traded: 4.19 crore), ZEEL (shares traded: 3.41 crore), IDFC First Bank (shares traded: 3.34 crore) and Federal Bank (shares traded: 2.87 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
FDC, Escorts, Balkrishna Industries, Granules India and Garware Technical Fibres witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Monday signalling bullish sentiment.
Stocks seeing selling pressure
21st Century Management Services, California Software Company, S&S Power Switchgears, Shree Ram Proteins and Tirupati Forge witnessed strong selling pressure in Monday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 441 stocks on the BSE 500 index settled the day in green, while 58 settled the day in red.
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Intense buying in financial stocks took the benchmark equity indices higher for the second straight session on Monday. ICICI Bank, Axis Bank, HDFC and Bajaj Finance led the gains. Overall, the BSE Sensex closed 592 points higher at 37,981, while the NSE Nifty index settled 177 points up at 11,227. We caught up with G Chokkalingam of Equinomics Research and Advisory to try and understand the market undercurrent.