Before the market: 10 things that will decide stock action on Tuesday

Meanwhile, Tuesday’s trading may have some impact as India retail inflation accelerated to a nine-month high of 5.49% year-on-year in September, driven by a persistent rise in vegetable prices and a lower base than a year ago. This is higher than the five-year low of 3.65% recorded the previous month and marks the first time since July that it has surpassed the Reserve Bank of India’s (RBI) medium-term target of 4%.

This is how analysts read the pulse of the market:
“On the daily charts, we can see that the Nifty has resumed its upward move towards 25500 after a brief three-day consolidation. The hourly momentum indicator has a positive crossover which is a buy signal. Therefore, we expect the Positive momentum will continue over the next trading sessions towards 25234 – 25360. Support base shifts towards 24920,” said Jatin Gedia of Sharekhan. Tejas Shah of JM Financial & BlinkX, said: “The candlestick pattern formed on the daily chart is encouraging on the upper level. On the upper side, the 25,250 – 25,300 zone remains important as a barrier and the market needs to cross it at the close. to gain major strength in Nifty. Support for Nifty is now seen at 25,000 and 24,750-800. On the upside, immediate resistance is at 25,150 levels and the next crucial resistance zone is at 25,250-300 levels.That said, here’s a look at what some key indicators suggest for Tuesday’s action:

US market:
Wall Street rose on Monday, with the S&P 500 and Dow hitting new intraday record highs as investors prepared for a week full of corporate earnings and key economic data that could challenge lofty stock market valuations. Chip stocks fueled gains in the S&P 500 and Nasdaq, with the benchmark index building on its record close on Friday after major banks got the third-quarter earnings season off to a positive start. An index of semiconductor companies rose 1.5% to a two-month high, boosted by a 2.5% rise in Nvidia. Other growth stocks such as Apple and Microsoft rose 1.1% and 0.9%, respectively, while energy stocks fell 0.2%, following a drop in oil prices.

European actions:
European stocks closed Monday’s volatile session at a two-week high as investors awaited corporate earnings and a policy decision from the European Central Bank later this week, although caution remained after China’s stimulus announcements of the weekend did not meet expectations.

The continental STOXX 600 index finished up 0.48%, with the technology, defense and utilities sectors each gaining more than 1.2%.

France’s main index lagged other major markets after credit rating agency Fitch downgraded the country’s outlook from “stable” to “negative” on Friday.

Technical View: Long Bullish Candle
A long bullish candle formed on the daily chart of Nifty, indicating an attempted bullish breakout of a smaller range move. Having moved within a broader high-low range of 25,200-24,700 levels in the last 3-4 sessions. The index has recovered and is now standing near the upper range of 25,200 levels.

A sustainable move above the upper range of 25,200 levels could be considered as a bullish breakout of the key hurdle and that could eventually push Nifty towards the next resistance of 25,500-25,600 levels in the near term. Immediate support lies at 24,900 level, said Nagaraj Shetti of HDFC Securities.

In the open interest (OI) data, the highest OI on the buy side was observed at 25,200 and 25,300 strike prices, while on the sell side, the highest OI was at the 25,000 strike price followed by 25,100.

Stocks showing a bullish bias:
The Moving Average Convergence Divergence (MACD) Momentum Indicator showed bullish trading on the counters. Gujarat FluorochemistsNeuland Laboratories, Pharmacy of humanity, Va Tech WabagAngel One, and ZF steering gear inter alia.

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

Stocks that indicate weakness in the future:
The MACD showed bearish signs on the counters pay, Balrampur chini millsSaregama, Five Star Business Finance and vedanta inter alia. The bearish MACD crossover on these counters indicated that they have just begun their downward journey.

Most active stocks in terms of value:
BSE (6,074 crores), CDSL (2,844 crores), Avenue Supermarket (2,050 million rupees), RIL (1,678 crores), HDFC Bank (1,558 crores), ICICI Bank (1,458 crores), and Zomato (Rs 1,273 crore), among others, were among the most active stocks on NSE in terms of value. Greater activity at a counter in terms of value can help identify the counters with the highest turnover for the day.

Most active stocks in terms of volume:
JP Power (Shares traded: 9.8 crore), YES Bank (Shares traded: 5.6 million rupees), Zomato (Shares traded: 4.5 million rupees), Easy Trip Planners (Shares traded: 3.7 million rupees), Bandhan Bank (Shares traded: 3.6 million of rupees), Tata Steel (Shares traded: Rs 3.5 crore) and Nalco (Shares traded: Rs 3.3 crore), among others, were among the most traded stocks in the session on NSE.

Stocks showing buying interest:
Shares of Aptus Value Hosuing Finance, BSE, Oberoi Realty, Tech Mahindra, Persistent System, Motilal Oswal and Anant Raj among others witnessed strong buying interest from market participants as they scaled their new highs of 52 weeks, indicating bullish sentiment.

Stocks experiencing selling pressure:
CreditAccess Grameen shares hit their 52-week lows, indicating bearish sentiment on the counter.

Sentiment Meter Bulls:
Overall, market breadth favored the bulls as 2,069 stocks ended in the green, while 1,972 names ended in the red.

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