Stock market outlook: Ahead of Market: 12 things that will decide Monday’s stock action

Benchmarks jumped on Friday after the U.S. economy contracted for the second straight quarter raised hopes the Fed would slow the pace of rate hikes. Strong quarterly earnings also contributed to street optimism.

Here is how analysts read the pulse of the market:

Mohammad said the index ended the month with a bullish engulfing formation on the monthly charts, hinting at improving sentiment.

“If the index holds above 17,018, it may extend the rise towards 17,550 where a host of resistance points are placed. However, the rapid rise from the lows of 16,438 to a high of just three trading sessions can lead to some consolidation or profit booking,” Mohammad said.

Sharekhan’s Gaurav Ratnaparkhi said the index received support near last week’s gap zone.

“Thereupon the index had a strong rally over the week. And today it broke through 17,000. “April to June and the 200 DMA. So the index may continue to stretch higher as long as it stays above 17,000. On the higher side, it may test 17,300 in the near term,” said Ratnaparkhi.

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

US stocks beat concerns and end higher
U.S. stocks rose for a third straight session on Friday as investors digested strong tech earnings and shrugged off concerns about high inflation and a recessionary environment. All major averages hit a winning week and their best month of 2022. The Dow Jones Industrial Average advanced 315.50 points, or nearly 1%, to 32,845.13. The S&P 500 jumped 1.4% to 4,130.29, and the Nasdaq Composite added about 1.9% to end the day at 12,390.69. For the week, the Dow Jones ended up almost 3%, while the S&P 500 and the Nasdaq Composite gained around 4.3% and 4.7% respectively.

European stocks shine

European markets closed sharply higher on Friday, with French stocks leading the region. The CAC 40 rose by 1.72% while the German DAX rose by 1.52%. London’s FTSE 100 rose 1.1%. climbed 2.0% since last Friday and 3.5% over the whole of July. The weekly gain came despite a slew of risky events, including the Federal Reserve’s latest interest rate decision on Wednesday.

Tech View: Bulls show their strength

On Friday, Nifty50 climbed for the third day in a row and broke above the 17,100 level at the close. During the day, the index released its 200-day simple moving average with a gap beginning earlier in the day, reflecting strength.

F&O: Support is moving up

As it is the start of the new series, options data is scattered to various distant strikes, said Chandan Taparia of

Securities. The maximum call open interest (OI) is at 17,500 followed by a strike of 18,000 while the maximum sell OI is at 16,500 followed by a strike of 16,000. marginal is seen at 17,500 followed by 17,300 strikes while the stake write is seen at 16,900 and 16,800 strikes. Options data suggests a wider trading range between 16,500 and 17,500, Taparia said.

Stocks Showing a Bullish Bias

The Momentum Moving Average Convergence Divergence (MACD) indicator showed a bullish trade setup on the counters of HDFC Life, Shree Renuka, NHPC, India Energy Exchange,

and HPCL. 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 NOCIL counters,

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

Most active stocks by value

Bajaj Finance (Rs 1,876 crore), Tata Steel (Rs 1,781 crore),

(Rs 1,741 crore), (Rs 1,571 crore), HDFC Bank (Rs 1,430 crore), HDFC (Rs 1,248 crore), Infosys (Rs 1,085 crore) and Sun Pharma (Rs 1,049 crore) and (Rs 421 crore) were among the most active stocks on NSE by 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

YES Bank leads the stock in terms of volumes, followed by Zomato, Tata Steel, Suzlon Energy, PNB, Vodafone Idea, Ashok Leyland and SAIL. These stocks were among the most traded stocks during the session on NSE.

Actions showing buying interest:

SBI Life,

PVR, GE Shipping, Rolex Rings, TVS Motor, Coal India, Adani Gas, SKF India, Blue Dart saw buying interest as they hit new 52-week highs, signaling bullish sentiment.

Stocks are under selling pressure

Sanofi India,

, and DRC Systems are among the stocks that came under heavy selling pressure and hit their 52-week lows, signaling bearish sentiment on the meters.

Sentiment meter favors bulls

Overall, the breadth of the market favored the bulls, as 2,100 stocks ended in the black, while 1,227 names settled with cuts.


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