The Nifty closed 1.89 per cent higher at 25,388, while the Sensex rose 1.77 per cent to 82,962. Both benchmark indices also hit record closing levels during the session, which was their best level since early June.
This is how analysts read the market pulse:
“The Nifty has broken out of its recent consolidation on the daily chart, indicating increasing optimism. Moreover, the index has remained above the critical 21-day EMA, a short-term moving average. The RSI on the daily chart is showing a bullish crossover, reinforcing the positive sentiment. The trend is expected to remain strong as the index closed above the recent consolidation high. On the upside, the rally could potentially continue towards the 25,470-25,500 range, while support is seen at 25,100,” said Rupak De of LKP Securities.
Tejas Shah of JM Financial & BlinkX said, “The rally is likely to continue and the Nifty may test the next resistance zone of 25,500-550 in the coming days. Support for the Nifty is now seen at 25,150-200 and 24,950-25,050. On the upside, the immediate resistance for the Nifty is at 25,400 Mark and the next resistance zone is at 25,500-550 levels.”
That said, let’s take a look at what some key indicators suggest for Friday’s action:
US Market:
Wall Street was little moved as stronger-than-expected producer price data kept a 25-basis-point rate cut by the Federal Reserve in play. The producer price index (PPI) for final demand rose 0.2% in August, beating the 0.1% estimate, while the core PPI rose 0.3% versus a 0.2% forecast. Initial claims for state jobless benefits were 230,000 for the week ended Sept. 7, in line with expectations. Moderna shares plunged 17.8% to their lowest level since November following a disappointing revenue forecast for next year. Despite the recent economic data, traders now anticipate an 85% chance of a 25-basis-point rate cut by the Fed at its next meeting.
Technical view:
The Nifty formed a bearish engulfing candle as bulls took control towards the end of the day and lifted the indices to a new high.
“A long bullish candlestick has formed on the daily chart which has cleared the crucial hurdle and also the range-bound move around 25200 levels. Technically, this pattern indicates a decisive bullish breakout of the important resistance zone at 25360 (1.382% Fibonacci extension). This is a positive indication,” said Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the buy side was observed at the strike prices of 25,400 and 25,500, while on the sell side, the highest OI was at the strike price of 25,400, followed by 25,300 and 25,350.
Stocks showing bullish bias:
The Moving Average Convergence Divergence (MACD) momentum indicator showed bullish trading on the counters of Page Industries, Apollo Hospitals Enterprise, Shriram Finance, Hitachi Energy India, Blue Dart Express, Ipca Laboratories and Polycab, 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 Investment Corporation, Bombay Burmah Trading Corporation, Caplin Point Laboratories, Vedant Fashions, Sundaram Finance and Gujarat State Petronet among others. The bearish crossover of the MACD on these counters indicated that they had just started their downward trajectory.
Most active stocks in terms of value:
RIL (Rs 3,274 crore), Zomato (Rs 2,864 crore), HDFC Bank (Rs 2,690 crore), Honasa Consumer (Rs 2,529 crore), Tata Motors (Rs 2,499 crore), Granules India (Rs 2,266 crore) and Kaynes Technology (Rs 2,014 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 40.8 crore), Suzlon Energy (shares traded: Rs 18.6 crore), Zomato (shares traded: Rs 12.1 crore), YES Bank (shares traded: Rs 9.5 crore), Tata Steel (shares traded: Rs 7.3 crore), Honasa Consumer (shares traded: Rs 5.1 crore) and Granules India (shares traded: Rs 3.8 crore), among others, were among the most traded stocks in the session on NSE.
Stocks showing buying interest:
Shares of Gujarat Fluorochemicals, Century Textiles, FDC, Kalyan Jewellers, Zomato, Bharti Airtel and BLS International Services, among others, witnessed strong buying interest from market participants as they hit their fresh 52-week highs, indicating bullish sentiment.
Stocks see selling pressure:
No major stocks hit their 52-week lows on Thursday.
Bullish-Bearish Sentiment Gauge:
Overall, market breadth favored the bulls as 2,295 stocks ended in the green, while 1,657 names closed 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)
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