Market watch: 10 factors that will determine how stocks perform on Tuesday

National benchmark index equity indices U.S. stock indexes snapped last week’s losing streak to close higher on Monday, led by gains in banking and consumer stocks, despite lingering concerns about the U.S. economy following last week’s jobs data that indicated a continued slowdown in the labor market.

He 50 elegant The S&P BSE index closed up 0.34% at 24,936 points. Sensex gained 0.46% to 81,559 points.

This is how analysts read the market pulse:

“Technically, the Nifty remains a sell option on the upside as long as it remains below 25,100. At the upside, the 25,000-25,100 range can act as a crucial near-term resistance, where sellers could step in again. At the downside, support lies at 24,800-24,785, below which selling could pick up,” said Rupak De of LKP Securities. Sharekhan’s Jatin Gedia said, “On the daily charts we can observe that the Nifty has tested and held the support zone of 24,850 – 24,800 which coincided with the 20-day moving average and 38.2% Fibonacci retracement level. Today’s low of 24,750 will be the stop loss for long positions and a break below it will lead to a trend reversal from a short-term perspective. The immediate hurdle on the upside lies at 25,000 – 25,100.”That said, let’s take a look at what some key indicators suggest for Tuesday’s action:

US Market:
Wall Street’s major indexes rose on Monday, recovering from last week’s steep losses as investors focused on potential Federal Reserve interest rate cuts for 2024 and an upcoming inflation report. Ten of the S&P 500’s eleven sectors rose, with the industrial and financial sectors up about 1.5%.

The market turbulence of the previous week, driven by concerns about the U.S. economy and elevated valuations, gave way to a rebound. As of 11:26 a.m. ET, the Dow gained 0.90%, the S&P 500 rose 0.61% and the Nasdaq gained 0.44%.

European stocks:
European stock markets rebounded on Monday, recovering from last week’s sharp falls as attention focused on the European Central Bank’s expected interest rate cut on Thursday.

The pan-European STOXX 600 index rose 0.8%, recovering from a 3.5% drop the previous week, its worst performance since March 2023. All STOXX 600 sector indexes rose except property, which fell 0.2% after a strong 4% gain the previous week. Travel and leisure led with a 2.1% rise, boosted by Entain’s 5.3% gain. London’s FTSE 100 rose more than 1%, while the FTSE 250 gained 0.8%.

Technical view:
A reasonable positive candlestick has formed on the daily chart of Nifty, after the formation of long bearish candlesticks on Friday. Technically, this pattern indicates the emergence of buying interest after a minor downward correction. The immediate support of the 20-day EMA has been recovered at 24900 after it was breached below in the previous session.

The short-term trend of the Nifty remains weak, but the market is showing signs of a sustainable bullish recovery after a minor downside correction. The Nifty needs to clear the 25,150 level to consider a possible trend reversal to the upside. The immediate support is at 24,750, said Nagaraj Shetti of HDFC Securities.

In the open interest (OI) data, the highest OI on the buy side was observed at strike prices of 25,000 and 25,100, while on the sell side, the highest OI was at strike price of 24,800, followed by 24,900.

Stocks showing bullish bias:
The Moving Average Convergence Divergence (MACD) momentum indicator showed bullish trading on the counters of Bharat Rasayan, Jubilant Pharmova, Orchid Pharma, United Spirits, Macfos, Blue Star and JSW Energy, among others.

The MACD is known for signaling trend changes in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the security’s price may experience an upward movement and vice versa.

Actions that indicate weakness in the future:
The MACD showed bearish signals on the counters of Tata Elxsi, TVS Holdings, LTTS, Apollo Hospitals, Nelco, Venky’s, Lupin, Mankind Pharma and BHDFC AMC among others. The bearish crossover of the MACD on these counters indicated that they have just started their downward journey.

Most active stocks in terms of value:
HDFC Bank (Rs 1,952 crore), ICICI Bank (Rs 1,698 crore), SBI (Rs 1,661 crore), Zomato (Rs 1,529 crore), RIL (Rs 1,317 crore), Mazagon Dock Shipbuilders (Rs 1,310 crore) and PFC (Rs 1,054 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 counters with higher trading volumes on the day.

Most active stocks in terms of volume:
Vodafone Idea (shares traded: Rs 62.9 crore), YES Bank (shares traded: Rs 12.1 crore), Suzlon Energy (shares traded: Rs 8.7 crore), Zomato (shares traded: Rs 5.8 crore), IDFC First Bank (shares traded: Rs 5.8 crore), Canara Bank (shares traded: Rs 4.5 crore) and Tata Steel (shares traded: Rs 3.2 crore), among others, were among the most traded stocks in the session on NSE.

Stocks showing buying interest:
Shares of Glenmark Life, Gujarat Fluorochemicals, DOMS Industries, Godrej Consumer, HUL, Dabur India and Jubilant Pharmova, among others, witnessed strong buying interest from market participants as they hit their fresh 52-week highs, indicating bullish sentiment.

Stocks see selling pressure:
CSB Bank shares hit 52-week lows, indicating bearish sentiment in the market.

Sentiment meter favors bears:
Overall, market breadth favored the bears as 2,390 stocks ended in the red, while 1,650 names ended in the green.

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