The benchmark NSE Nifty 50 index rose 0.33 per cent to 25,235.9, while the S&P BSE Sensex added 0.28 per cent to 82,365.7. They rose 1.6 per cent this week and around 1 per cent in August, marking their third consecutive weekly and monthly gain.
This is how analysts read the market pulse:
“Bulls are in complete control of the markets at the current juncture and are using every dip to create long positions. Support for Nifty is now seen at 25,175-200 and 25,000-24,950 levels. On the upside, immediate resistance for Nifty is at 25,250 level and the next crucial resistance zone is at 25,450-500 levels. Overall, more follow-through strength can be expected in today’s trading session,” said Tejas Shah, Technical Research, JM Financial & BlinkX. Rupak De of LKP Securities said, “The market strength is likely to persist as long as the index remains above 25,000. A drop below this level could trigger a significant correction. On the upside, the current optimism could take the index towards 25,500 in the near term.”
That said, let’s take a look at what some key indicators suggest for Monday’s action:
US market
The Nasdaq and S&P 500 closed higher on Friday, with Tesla and Amazon rising after fresh U.S. economic data raised expectations that the Federal Reserve will modestly cut interest rates in September.
U.S. consumer spending rose solidly in July, suggesting the economy remained strong while prices rose moderately.
The S&P 500 gained 1.00% to 5,647.60 points, while the Nasdaq Composite gained 1.11% to 17,710.73. The Dow Jones Industrial Average gained 0.52% to 41,549.91.
European stocks
European stocks rose to a record high on Friday, ending a turbulent month on a bright note after a significant drop in eurozone inflation cemented market expectations of an interest rate cut in September.
The pan-European STOXX 600 index rose 0.1% to close above 525 points for the first time after hitting a record intraday high of 526.66 points. The index gained 1.2% in August, rising for the second consecutive month.
Spain’s IBEX 35 gained 0.4% after retail sales data showed a 1% rise in July, while Germany’s DAX closed unchanged after data showed unemployment rose less than expected.
Technical view: Rounded bottom pattern
The Nifty closed Friday’s session with a gain of 84 points and formed a rounding bottom pattern, indicating strength, on the daily chart. Based on this breakout, the index could move towards 25,500 levels in the near term. If the index sustains above 25,500, the Nifty could head towards 26,000-26,250 levels, which is the target of the rounding bottom pattern, said Hrishikesh Yedve of Asit C. Mehta Investment Intermediates.
“On the downside, the 9-day exponential moving average (DEMA), located near 24,950, will act as an immediate support for the Nifty in the near term. As long as the index remains above 24,950, a ‘buy on dips’ strategy should be adopted,” he said.
Stocks that show an upward bias
Momentum Indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Paytm, Safari Industries, Praj Industries, Prestige Estates, RVNL and Sapphire Foods, among others.
Stocks show signs of weakness ahead
The MACD showed bearish signals on the counters of Aster DM Healthcare, Bharat Forge, Inox Wind, Kfin Technologies, Aurobindo Pharma and Aegis Logistics among others. A bearish crossover in the MACD on these counters indicated that they had just started their bearish run.
Most active stocks in terms of value
HDFC Bank (Rs 36,481 crore), RVNL (Rs 7,350 crore), RIL (Rs 6,298 crore), Dixon Technologies (Rs 6,101 crore), Bharti Airtel (Rs 6,011 crore), Oil India (Rs 5,913 crore) and Prestige Estate (Rs 4,132 crore), among others, were among the most active stocks on NSE in terms of value. Higher activity on a counter in terms of value can help identify the counters with the highest trading volumes on the day.
Most active stocks in terms of volume
HDFC Bank (shares traded: 22.2 crore), RVNL (shares traded: 12.2 crore), Shree Renuka Sugar (shares traded: 11.3 crore), YES Bank (shares traded: 11.1 crore), Bandhan Bank (shares traded: 10.9 crore), Oil India (shares traded: 7.9 crore) and Suzlon Energy (shares traded: 5.4 crore), among others, were among the most traded stocks in the session on NSE.
Stocks that show buying interest
Shares of Triveni Engineering & Industries, Sundaram Finance, Radico Khaitan, Godfrey Phillips, GSPL, Safari Industries and KEC International, among others, witnessed strong buying interest from market participants as they touched their fresh 52-week highs, indicating bullish sentiment.
Stocks see selling pressure
No major stocks hit their 52-week lows on Friday.
Sentiment gauge favors bulls
Overall, market breadth favored the bulls as 2,157 stocks ended in the green, while 1,784 names closed in the red.
(Disclaimer: The recommendations, suggestions, views and opinions of the experts are their own and do not represent the views of The Economic Times)
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