Jimeet Modi of SAMCO Securities, said the index has reclaimed much of last week’s losses, and is now trading at the upper end of last three weeks’ trading range. “However, the occurrence of large long shadows for two consecutive weeks is a sign that sellers are available in this zone. The 10,100-10,500 zone will be a very important resistance for Nifty going ahead,” he said.
Gaurav Ratnaparkhi of Sharekhan said the weekly chart showed Nifty has recovered sharply during the week gone by after a steep drop in the previous one. The index is now stone’s throw away from its swing high of 10,328.
“Nifty50 may now head towards the 10,550 level, which is also the 61.8 per cent retracement of the January-March fall, and will have immediate support in the 10,155-10,135 zone,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Monday’s market action:
Covid-19 surge halts Wall Street rally
Wall Street opened higher on Friday, but cut gains and turned negative by the close amid fears over a resurgence in coronavirus cases across the country. The Dow slipped o.8% or 200 points, while the S&P500 fell 0.5% and the tech-heavy Nasdaq ended flat.
European shares logged gains
European stocks pushed higher on Friday and headed for weekly gains after days of worries over rising coronavirus cases in parts of the world. Potential good news on the US-China trade front drove some momentum. The Stoxx Europe 600 index rose 0.8%, German DAX 30 gained 1%, the French CAC40 climbed 1.3% and the FTSE100 1.2%.
Tech View: Nifty charts show next stop 10,338
Nifty50 on Friday topped the 10,200 level, much on the expected lines, following a decisive breach of the hurdle at the 10,000 mark in Thursday’s session. Analysts said the index has the potential to hit the recent high of 10,338 and even 10,550 level in the short run. The 10,100 level will be the immediate support for Nifty50 to watch out for next week.
F&O: Nifty range between 9,900 and 10,500
In the F&O table, maximum Put open interest stood at 9,000 followed by 9,500 levels, while maximum Call OI was at 10,500 followed by 11,000. On Friday, there was Call writing at 11,000 and 10,600 levels, while meaningful Put writing was seen at 10,000 and 10,100 levels. The options data suggested a wider trading range between 9,900 and 10,500 levels. India VIX moved 4.75 per cent lower to 30 level. The volatility index continued to decline for the second session, providing comfort and support to the market.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of GMR Infrastructure, DLF , Jai Corp, Power Grid Corporation, Piramal Enterprises, Rail Vikas Nigam, HDFC Life Insurance, Jump Networks, Maruti Suzuki India, Himadri Speciality, Suven Pharmaceutical, Infibeam Avenues, Suven Life Sciences, ABB India, Kajaria Ceramics, ICICI Securities, Filatex India, SJVN, Birla Corporation, Uflex, Aarti Industries Ltd, Rites, Trent, NIIT, Pil Italica Lifestyles and Essel Propack, among others.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Vedanta, City Union Bank, Trident, Biocon, Cummins India, PVR, Arvind, Alkem Laboratories, Central Depository, FACT, Aditya Birla Money, JHS Svendgaard Labor, Shoppers Stop, IL&FS Investment, Huhtamaki PPL, PPAP Automotive, Tata Metaliks, AstraZeneca Pharma, Taj GVK Hotels, Khadim India and Vishwaraj Sugar, among others.
Most active stocks in value terms
RIL (Rs 8432.07 crore) , Bajaj Finance (Rs 4940.90 crore) , ICICI Lombard General Insurance Company Ltd. (Rs 3388.78 crore) , HDFC Bank (Rs 2463.41 crore) , Bharti Airtel (Rs 2347.42 crore) , HDFC (Rs 2238.51 crore) , Axis Bank (Rs 2168.78 crore) , Muthoot Finance (Rs 2098.02 crore) , IndusInd Bank (Rs 2051.93 crore) and Bajaj Finserv (Rs 2049.08 crore) were among the most active stocks on Dalal Street on Friday 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: 54.05 crore) , Tata Motors (Shares traded: 13.54 crore) , BHEL (Shares traded: 10.09 crore) , Indiabulls Housing Finance (Shares traded: 9.79 crore) , SBI (Shares traded: 7.69 crore) , Federal Bank (Shares traded: 6.18 crore) , Uttam Value Steel (Shares traded: 6.14 crore) , Ashok Leyland (Shares traded: 6.03 crore) , Axis Bank (Shares traded: 5.21 crore) and ICICI Bank (Shares traded: 5.14 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Suven Pharma , EID Parry, RIL, Laurus Labs and Ruchi Soya Industries witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday signalling bullish sentiment. Stocks seeing selling pressure: Rajesh Exports, Khandwala Securities and B.C. Power Controls witnessed strong selling pressure in Friday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours the bulls
Overall, market breadth remained in favour of bulls. As many as 334 stocks on the BSE 500 index settled the day in green, while 162 settled the day in red.
Podcast: Should one go with the wind in this market?
The bulls shrugged off every negative news and ended last week on a firm note. But the market is no longer in tandem with the ground reality of the economy. Some analysts fear that this dichotomy might eventually return to haunt investors. Will that be the case? Should one really go with the trend and buy in this market?
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