NEW DELHI: Nifty continued its positive momentum for the fourth consecutive day ending above the 10,450 level on Tuesday.
Analysts said at its current level, Nifty’s downside support stood at 10,300 level and while upside resistance at 10,600 level.
Chandan Taparia of Motilal Oswal Financial Services said Nifty has to hold above 10,333 level to extend its move towards the 10,600-10,650 zone, while support shifted to 10,250 and 10,180 levels.
Nagaraj Shetti of HDFC Securities said positive sequential movement of forming higher tops and bottoms continued in Nifty on the daily timeframe chart, and the index is currently forming a new higher top of the sequence.
“Still the uptrend is not complete and we expect Nifty to show minor trend reversal at the highs of around 10,600-10,650 levels in the next few sessions. The short-term trend continues to be positive. The upside target of 10,600-10,650 is intact,” he said.
Shrikant Chouhan of Kotak Securities said the Fibonacci retracements theory suggests the 61.80 ratio acts as a major support or resistance for stocks or indices. “Nifty will approach the 61.80 level at 10,550 and that may trigger either profit taking or negative reversal activity. Traders should be cautious between the 10,500 and 10,600 levels. Don’t be in a hurry to re-enter the market if it corrects from higher levels,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s market action:
US shares gain on signs of economic recovery
Wall Street’s three major indexes rose on Tuesday as the pace of decline in business activity slowed, bolstering hopes that the worst of the coronavirus crisis was over. At 7:39 pm (IST), the Dow Jones Industrial Average was up 171.55 points, or 0.66 per cent, at 26,196.51, the S&P 500 was up 22.01 points, or 0.71 per cent, at 3,139.87. The Nasdaq Composite was up 76.17 points, or 0.76 per cent, at 10,132.64.
European shares near two-week high
European shares rose to a near two-week high on Tuesday, powered by cyclical stocks after latest economic data signalled that business activity in the continent was rebounding faster than expected from a coronavirus-driven slump. The pan-European STOXX 600 index rose 1.4 per cent as economically sensitive sectors such as banks, automakers and insurers jumped between 2 per cent and 3.5 per cent.
Tech View: Nifty negates Monday’s Doji
Nifty50 formed a bullish candle on the daily chart on Tuesday, negating Monday’s indecisive Doji candle. Normally, the negation of such a pattern (Doji) more often results in a sharp movement in the opposite direction, says Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
Check out the candlestick formations in the latest trading sessions
F&O: Trading range shifts to 10,100-10,650 range.
Nifty’s maximum Put open interest stood at 10,000 followed by 9,500 levels, while maximum Call OI was at 10,500 followed by 11,000 levels. Minor Call writing was seen at 10,500 followed by 10,650 levels, while meaningful Put writing was seen at 10,400 followed by 10,300 levels. Options data suggested a shift in trading range to the 10,100-10,650 zone.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of Hindalco Industries, Indian Overseas Bank, Sterlite Technologies, Sequent Scientific, Birlasoft, Castrol India, Tata Steel BSL, Godrej Consumer Prod, Engineers India, Central Depository, SBI Life Insurance, Hikal, InterGlobe Aviation, Deepak Nitrite, Welspun India, Astec Lifesciences, The Ramco Cements, Inox Leisure and Aptech, among others.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Orient Green Power, Eros International, Gujarat State Petronet, The New India Assurance, MOIL, Caplin Point Lab, Bliss GVS Pharma, Metropolis Healthcare, Career Point, Sarda Energy, L&T Technology Services, CEAT, MSTC, Gabriel India, Shree Pushkar Chem, TCNS Clothing, InfoBeans Tech, The Anup Engineering and Allsec Technologies.
Most active stocks in value terms
Bajaj Finance (Rs 4744.95 crore) , Glenmark Pharma (Rs 3234.41 crore) , RIL (Rs 3032.84 crore) , IndusInd Bank (Rs 2346.55 crore) , Indiabulls Housing Finance (Rs 1495.48 crore) , HDFC Bank (Rs 1486.29 crore) , Larsen & Toubro (Rs 1382.51 crore) , Axis Bank (Rs 1344.12 crore) , SBI (Rs 1250.44 crore) and Bajaj Finserv (Rs 1238.15 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.
Most active stocks in volume terms
Vodafone Idea (Shares traded: 44.23 crore) , BHEL (Shares traded: 9.14 crore) , PNB (Shares traded: 8.38 crore) , IDFC First Bank Ltd. (Shares traded: 7.36 crore) , Tata Motors (Shares traded: 6.86 crore) , SBI (Shares traded: 6.55 crore) , Glenmark Pharma (Shares traded: 6.51 crore) , Bank of Baroda (Shares traded: 6.45 crore) , Indiabulls Housing Finance (Shares traded: 6.10 crore) and Federal Bank (Shares traded: 5.34 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Suven Pharma, Dixon Technologies (India), FDC, Hindalco Industries and Syngene International witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.
Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 376 stocks on the BSE 500 index settled the day in green, while 123 settled the day in red.
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Domestic market sentiment seems to have turned optimistic on the back of news of de-escalation in hostilities on China border and the faster pace of Covid-19 recoveries increasing in spite of the new virus infections. But can they continue to support the ongoing rally?
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