Manish Hathiramani, technical analyst at Deen Dayal Investments said, “On the upside, there is a stiff resistance at 14,700 level and until we do not get past that, we will not enter a bullish trend. It is a tight range and traders need to be cautious in their approach.”
Ajit Mishra, VP – Research at Religare Broking said, “We believe volatility is likely to remain high for the markets in absence of any major positive trigger. Going forward, the updates on Covid-19 cases, vaccination and earnings announcements, especially from Nifty majors, would be key monitorables. We reiterate our cautious stance and suggest preferring hedged positions.”
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
US stocks tumble as investors dump tech megacaps
The Nasdaq index fell more than 2% on Tuesday as steep declines in megacap growth stocks led Wall Street below record trading levels, with investors seeking shelter in more defensive parts of the market. The Dow Jones Industrial Average was down 256.42 points, or 0.75%, at 33,856.81, the S&P 500 was down 45.00 points, or 1.07%, at 4,147.66, and the Nasdaq Composite was down 280.58 points, or 2.02%, at 13,614.54.
European shares fall as tech, auto stocks weigh
European shares inched lower on Tuesday as an early boost from commodity, bank and travel stocks was offset by losses in highly valued technology companies and automakers. The pan-European STOXX 600 index inched down 1.50%, with the German DAX falling 2.49% and UK’s FTSE 100 rising 0.67% after a long weekend.
Tech View: Nifty forms bearish candle
Nifty50 on Tuesday saw late selling that dragged the index below the 14,500 level at close. The index formed a bearish candle on the daily chart and formed a higher high and low. As long as the index stays above the swing low of 14,416, analysts see chances of a recovery. “Nifty50 couldn’t stretch beyond its key hourly moving averages,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan.
F&O: Easing VIX only solace in market
India VIX fell 2.87% from 23.69 to 23.01 level. India VIX needs to hold below 20 level to again attract 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 level followed by 15,500. There was marginal Call writing at strike price 15,000, while minor Put writing was seen at strike price 14,000. Options data suggested a wider trading range between 14,000 and 15,000 levels, while the immediate trading range was seen in the 14,200-14,800 zone.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of IDBI Bank, NBCC (India), UPL,
, The New India Assurance, Welspun India, Kansai Nerolac Paint, Sundaram Fasteners, Dalmia Bharat, V-Mart Retail and TeamLease Service.
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 Hindalco, Tata Chemicals, Hindustan Zinc,
, Lupin, Eris Lifesciences, Amrutanjan Healthcare, , ADF Foods, Atul Ltd, Cera Sanitaryware and Xpro India. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Tuesday’s most active stocks
Bajaj Finance (Rs 2743.70 crore), Tata Steel (Rs 2677.58 crore), SAIL (Rs 2564.18 crore), Adani Ports & SEZ (Rs 2423.73 crore), SBI (Rs 2064.65 crore), RIL (Rs 1952.03 crore), Tata Chemicals (Rs 1688.69 crore), PNB (Rs 1592.22 crore), HDFC Bank (Rs 1508.11 crore) and Adani Enterprises (Rs 1309.91 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.
Tuesday’s most active stocks in volume terms
PNB (Shares traded: 42.61 crore), SAIL (Shares traded: 19.52 crore), BHEL (Shares traded: 15.41 crore), Vodafone Idea (Shares traded: 13.03 crore), Bank of Baroda (Shares traded: 11.78 crore), Dish TV India (Shares traded: 10.63 crore), Yes Bank (Shares traded: 10.44 crore), Reliance Power (Shares traded: 9.84 crore) and IDFC First Bank (Shares traded: 6.43 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Tata Steel BSL, Tata Elxsi, Grindwell Norton, GE Shipping and Orchid Pharma witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.
Stocks seeing selling pressure
Infibeam Avenues, Sintercom India, Supreme Engineering, Suvidhaa Infoserve and Kalyan Jewellers witnessed strong selling pressure in Tuesday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, market breadth remained in favour of bears. As many as 186 stocks on the BSE 500 index settled the day in green, while 313 settled the day in red.
Podcast: Why did D-Street succumb to last hour selloff? >>>
A late selloff surprised many investors on Tuesday. Benchmark indices, holding gains for most of the session, surrendered as bank stocks erased gains, while selling in Reliance shares intensified. At close, Nifty50 was below the psychological mark of 14,500. Sensex, which was just a few points away from reclaiming the 49,000-mark earlier in the day, lost 465 points to close at 48,250-odd level. We spoke to Ajit Mishra of Religare Securities to share his views on the market.