Ahead of Market: 12 things that will decide stock action on Thursday – Economic Times

NEW DELHI: Nifty saw a gap-up opening on Wednesday and traded on a volatile note before ending slightly above its opening levels. The headline index formed an ‘Inside Bar’ formation, similar to a Harami Cross pattern as Nifty formed an indecisive candle for the day.

Gaurav Ratnaparkhi of Sharekhan said, “On the daily chart, the Nifty has formed an Inside bar for which the breakout level on the upside is at 14,724. The overall structure shows that the benchmark index is preparing for the next leg of the recovery. It looks set to test 15,000 on the upside in the short term. The swing low of 14,416 will act as a reversal level for the bullish stance.”

“We feel the timely intervention by the apex bank has relieved the participants to some extent amid the prevailing uncertainty. However, it failed to trigger a decisive move in the benchmark indices and we might see further consolidation,” said Ajit Mishra, vice president of research at Religare Broking.

That said, here’s a look at what some of the key indicators are suggesting for Thursday’s action:
US stocks rise as megacap stocks bounce

The S&P 500 and the Nasdaq rose on Wednesday as megacap stocks bounced from a steep selloff in the previous session and private jobs rose in April, but a decline in Boeing shares weighed on the Dow. The Dow was down 49.24 points, or 0.14%, at 34,083.79, the S&P 500 was up 5.22 points, or 0.13%, at 4,169.88 and the Nasdaq Composite was up 34.08 points, or 0.25%, at 13,667.58.

European shares rise as earnings spurs recovery hopes
European stocks bounced back on Wednesday after a sharp selloff in the previous session, helped by gains in commodity and banking stocks, while optimism about a strong earnings season and a speedy economic recovery dominated the markets. The pan-European STOXX 600 index rose 1.83%, wiping out almost all of its 1.4% loss on Tuesday, with the German DAX jumping 2.04% and UK’s FTSE 100 gaining 1.68%.

Tech View: Nifty forms Inside Bar candle
Nifty50 on Wednesday formed an Inside Bar pattern and also what looked like a Harami Cross on the daily candle, indicating a tug of war between the bulls and the bears. Analysts see choppy trades ahead. Chandan Taparia of Motilal Oswal Securities said the index formed a high low with support at 14,500 level, but mostly traded inside a trading range. Taparia said a hold above the 14,600 level may extend Nifty50’s gains to 14,700 and 14,880 levels, while downside supports exist at 14,500 and 14,400 levels, respectively.

Check out the candlestick formations in the latest trading sessions

F&O: Falling VIX may help bullish view
India VIX fell 4.55% from 23.01 to 21.69 level. India VIX needs to hold below 20 level to again attract a bullish stance. On the options front, maximum Put Open Interest stood at 14,000 level, followed by 13,500, while maximum Call OI was seen at 15,000 followed by 15,500 levels. There was marginal Call writing at strike price 15,000 and minor Put Writing at 14,600 and 14,000 levels. Options data suggested a wider trading range between 14,000 and 15,000 levels, while the immediate trading range stood between 14,400 and 14,800 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Wednesday showed bullish trade setup on the counters of Lupin,

, Aurobindo Pharma, MTNL, Torrent Power, Karur Vysya Bank, PI Industries, JK Lakshmi Cement, Somany Ceramics, Cera Sanitarywarea and .

The MACD is known for signalling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Glenmark Pharma, Snowman Logistics, Suven Life Sciences, Panacea Biotec, Can Fin Homes, Sterlite Technologies, HEG, Jyothy Labs, Poly Medicure, Kamdhenu Ltd, Polycab India, Affle (India), Goa Carbons and Sheela Foam. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Wednesday’s most active stocks
Lupin (Rs 3077.81 crore), Bajaj Finance (Rs 2428.06 crore), Adani Ports & SEZ (Rs 2191.07 crore), Vedanta (Rs 2190.34 crore), Tata Steel (Rs 2054.42 crore), Sun Pharma (Rs 1703.43 crore), SBI (Rs 1448.72 crore),

(Rs 1395.08 crore), SAIL (Rs 1362.92 crore) and RIL (Rs 1100.03 crore) were among the most active stocks on Dalal Street on Wednesday in value terms.

Wednesday’s most active stocks in volume terms
PNB (Shares traded: 17.83 crore), BHEL (Shares traded: 16.72 crore), SAIL (Shares traded: 10.48 crore), Vedanta (Shares traded: 8.31 crore), Vodafone Idea (Shares traded: 8.19 crore), IDBI Bank (Shares traded: 7.62 crore), Bank of Baroda (Shares traded: 6.65 crore), Yes Bank (Shares traded: 5.56 crore), ONGC (Shares traded: 4.76 crore) and Tata Steel BSL (Shares traded: 4.58 crore) were among the most traded stocks in the session.

Stocks showing buying interest
GE Shipping, Lupin, JSW Energy, BHEL and PI Industries witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Wednesday signalling bullish sentiment.

Stocks seeing selling pressure
Best Agrolife,

, Suvidhaa Infoserve, Infibeam Avenues and Kalyan Jewellers witnessed strong selling pressure in Wednesday’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 330 stocks on the BSE 500 index settled the day in green, while 162 settled the day in red.

Podcast: Can RBI’s new measures change the market mood? >>>

Domestic indices jumped on Wednesday buoyed by buying in banking stocks as the RBI announced a slew of measures aimed at increasing liquidity and restructuring loans of Covid-hit small businesses and individuals. Closing near the day’s high, Sensex added 424 points, while Nifty50 topped the 14,600-mark. We spoke to Binod Modi, Head Strategy at Reliance Securities to share his views on the market.

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