Deepak Jasani of HDFC Securities said Nifty has formed a Doji after a three-day rise, suggesting a pause ahead and possibly a minor reversal from here. “On an up-moves, the 10,394-10,458 zone could offer resistance while support will come from the 10,167-10,244 zone,” he said.
Vinod Nair of Geojit Financial Services said there are concerns with regard to increasing Covid infections and the ongoing border standoff with China, and investors are advised to keep a short-term outlook for the time being.
Shrikant Chouhan of Kotak Securities said positive US futures helped domestic markets end higher. He said Bank Nifty should outperform Nifty in the next upmove.
“The Doji on Nifty chart conveyed a sense of indecision or tug-of-war between buyers and sellers. Neither the bulls nor the bears were able to gain control and a turning point could be developing. Buying should be done in this market either on dips or only if the index crosses the 10,410 level. Global markets would influence our market’s behaviour,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Tuesday’s market action:
US shares lower as virus cases mount
US stocks opened sightly lower on Monday as concerns of a resurgence in coronavirus infections fueled worries of another setback to business activity. The Dow Jones Industrial Average fell 6.38 points, or 0.02 per cent, at the open to 25,865.08. The S&P 500 opened lower by 3.32 points, or 0.11 per cent, at 3,094.42. The Nasdaq Composite dropped 0.63 points, or 0.01 per cent, to 9,945.49 at the opening bell.
European shares slip on virus fears
European shares slipped on Monday as signs of a resurgence in coronavirus cases in Germany and elsewhere unnerved investors who were hoping for a swift economic recovery from the crisis. The pan-European STOXX 600 index was down 0.3 per cent, pulling back from early losses of as much as 1 per cent. Oil and gas companies and banks were a drag on the index, falling 1.4 per cent and 0.9 per cent, respectively.
Tech View: Nifty forms indecisive Doji
While forming higher highs and lows, Nifty made an indecisive Doji on Monday, as the opening and closing levels of the index were almost the same. “One cannot rule out profit booking at higher levels,” said analysts, who believe ‘buy on dips’ would be the right strategy in this market.
Check out the candlestick formations in the latest trading sessions
F&O: Nifty range now at 10,000-10,500
In monthly options, maximum Put open interest stood at 10,000 level followed by 9,500, while maximum Call OI was at 10,500 followed by 11,000 levels. Call writing was seen at 10,800 followed by 10,600 levels, while there was meaningful Put writing at 10,100 followed by 10,200 levels. Options data suggested a shift in trading range between 10,000 and 10,500 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Monday showed bullish trade setup on the counters of Glenmark Pharma, Nalco, Vedanta, Coal India, JSW Steel, UPL, Strides Pharma Sciences, Adani Enterprises , Sun TV Network, PVR, FDC, Asian Paints, Cummins India, Aditya Birla Money , Syngene International, Heidelberg Cement, Subex, Elgi Equipment, Ircon International, Balmer Lawrie, NIIT, Ajmera Realty and Edelweiss, among others.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Hindalco Industries, Indian Overseas Bank, Spicejet, PetronetLNG, Brightcom Group, Airan, Advanced Enzyme Tech, Indbank Merchant, CESC Ventures, Liberty Shoes, Shilpa Medicare, Whirlpool, Allied Digital Services, Oracle Financial Services, Nucleus Software, Mold-Tek Technologies, TVS Electronics, Saksoft, Aspinwall, Creative Peripherals and Ruby Mills. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
RIL (Rs 4919.55 crore) , Glenmark Pharma (Rs 4721.55 crore) , Bajaj Finance (Rs 3931.09 crore) , Indiabulls Housing Finance (Rs 2060.52 crore) , Cipla (Rs 1957.77 crore) , Axis Bank (Rs 1734.85 crore) , Bajaj Finserv (Rs 1558.88 crore) , HDFC Bank (Rs 1541.27 crore) , SBI (Rs 1509.53 crore) and ICICI Bank (Rs 1487.34 crore) were among the most active stocks on Dalal Street on Monday 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: 119.29 crore) , IDFC First Bank Ltd. (Shares traded: 12.00 crore) , BHEL (Shares traded: 9.17 crore) , PNB (Shares traded: 8.98 crore) , Glenmark Pharma (Shares traded: 8.91 crore) , Indiabulls Housing Finance (Shares traded: 8.52 crore) , SBI (Shares traded: 8.00 crore) , Federal Bank (Shares traded: 7.75 crore) , RBL Bank (Shares traded: 7.66 crore) and Tata Motors (Shares traded: 6.85 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Glenmark Pharma, Suven Pharma , Sun Pharma Advanced Research, FDC and Laurus Labs witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Monday signalling bullish sentiment.
Stocks seeing selling pressure
Univastu India witnessed strong selling pressure in Monday’s session and hit its 52-week lows, signalling bearish sentiment on this counter.
Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 354 stocks on the BSE 500 index settled the day in green, while 144 settled the day in red.
Podcast: Has Dalal Street begun a secular bull run? >>>
Monday’s overall market breadth remained in favour of the bulls with 1,877 stocks on BSE ending in the green, while 872 settled in the red. Nifty remained volatile throughout the day, signalling indecisiveness among traders. Is this market on a secular bull run, or is the ongoing rally going to run out of steam anytime now?
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