Ahead of Market: Ahead of Market: 10 things that will decide D-Street action on Monday

Nifty continued to consolidate below 17,500 levels on Friday August 5, 2022, after RBI raised the repo rate in line with market expectations. On the sector front, a mixed trend continued in which IT, FMCG and Financials were the winners while Automotive, Energy and Media settled into the red.

Here is how analysts read the pulse of the market:

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said the Nifty’s short-term trend continues to be choppy with high volatility. “As long as Nifty remains below the 17,500-level hurdle, there is a possibility of muted movement in the market. A sustained move above 17,500 could open the next upside targets of 17,800-17,900 short-term Immediate support is placed at 17,200 levels,” he said.

Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities said confirmation of Nifty’s strength is only above 17,557, while immediate support is seen at 17,121 and below the same, expect Nifty to slide quickly towards 16,750-16,800 zone.

That said, here’s a look at what some key indicators suggest for Monday’s action:

Wall Street closes lower

U.S. stock indexes closed mostly lower on Friday after a rollercoaster day following a hit U.S. jobs report that offered both good and bad news for Wall Street.

The benchmark S&P 500 index ended down just 0.2% as investors reacted to the report, which showed U.S. employers unexpectedly added hundreds and thousands more jobs than expected on last month.

Tech stocks and other high-growth companies once again took the brunt of the sell-off amid concerns over rising rates. The Nasdaq composite pared early losses and closed down 63.03 points, or 0.5%, at 12,657.55. Good news in the labor market helped limit losses for the Dow Jones Industrial Average, whose stocks tend to move more along with expectations for the overall economy. It added 76.65 points, or 0.2%, to close at 32,803.47.

The S&P 500 slipped 6.75 points to end at 4,145.19. The S&P 500 and Nasdaq both posted gains for the week.

European stocks post two weeks of gains

European stocks fell on Friday after a stronger-than-expected U.S. jobs report raised bets on another 75 basis point rate hike by the Federal Reserve next month, while fears of a Dimmer growth prospects pushed stocks toward weekly losses.

The pan-European STOXX 600 fell 0.8%, extending early-day losses after nonfarm payrolls in the United States rose by 528,000 jobs last month, the biggest gain since February.

The benchmark index lost 0.6% this week, spending two weeks in positive territory, on concerns over four economic data in the region, growing geopolitical tensions and fears that higher interest rates could push the economy into a recession.

Technical view

Nifty50 Friday ended on a flat note for the second straight session. The index formed an indecisive candle on the daily chart. On a weekly scale, the index formed a small bullish candle. Analysts said the index could lose momentum after recent gains. They see 17,500 as an immediate resistance level. The 17,150 level may provide strong support, they said.

Stocks Showing a Bullish Bias

The Momentum Moving Average Convergence Divergence (MACD) indicator showed a bullish trade setup on the counters of FDC Ltd,

, Tata TV and .

The MACD is known to signal 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 upward movement and vice versa.

Stocks Signal Weakness Ahead

The MACD showed bearish signs on the counters of PNB Housing, Thermax,

, , and . A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks by value

RIL (Rs 1,636 crore), ICICI Bank (Rs 1,341 crore), SBI (Rs 1,134 crore), ONGC (Rs 906 crore), Infosys (Rs 867 crore) and M&M (Rs 723 crore) were among the top stocks. most active on NSE in terms of value. Higher activity on a counter in terms of value can help identify counters with the highest turnover for the day.

Most active stocks by volume

ONGC (shares traded: 6.6 crores), Tata Steel (shares traded: 5.4 crores), NTPC (shares traded: 3.4 crores), Coal India (shares traded: 3.2 crores), SBI (shares traded: 3.2 crores) : 2.1 crore) and ICICI Bank (Shares traded: 1.6 crore) were among the most traded stocks during the session on NSE.

Stocks showing buying interest

Shares of

Tata Elxsi, , , and witnessed strong buying interest from market participants as they hit new 52-week highs, signaling bullish sentiment.

Stocks are under selling pressure

Shares of

witnessed heavy selling pressure and hit their 52-week lows, signaling bearish sentiment on the meters.

Sentiment meter favors bulls

Overall, market breadth favored losers as 1,808 stocks ended in the green, while 1,543 names settled with cuts.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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