Market Awaited: 10 Things That Will Decide How D-Street Performs on Monday

National benchmark stock indices, Sensex and Nifty50closed slightly lower on Friday, weighed down by consumer goods and energy stocks. However, they posted their best weekly performance since late June, ahead of a likely rate cut by the Federal Reserve.

The Nifty 50 closed 0.13 per cent lower at 25,356 points, while the Sensex fell 0.09 per cent to 82,890. Both indices rose around 2 per cent each during the week, their best gains since late June.

Here’s how analysts view the market:

“The index remained range-bound throughout the day, finding resistance at the ascending trend line on the daily chart. On the lower time frames, the RSI has entered a bearish crossover, indicating a possible reversal of the bearish momentum. In the near term, the trend may remain sideways. Support is seen at 25,150–25,200, while resistance is seen at 25,460,” said Rupak De of LKP Securities.

Jatin Gedia of Sharekhan by BNP Paribas said, “On the daily charts, we can observe that after the strong upside move in the previous trading session, the Nifty has consolidated. The price action is in line with expectations and may continue over the next few trading sessions. The underlying tone remains bullish and the index is likely to resume its upside move once the consolidation phase is completed. The upside target is expected to be between 25,500-25,700. Support is placed in the 25,200-25,150 zone.”

That said, let’s take a look at what some key indicators suggest for Monday’s action:

US Market:

financial world Stocks rose again on Friday, adding to weekly gains following economic data that set the stage for the Federal Reserve to cut interest rates. Analysts say new jobs and inflation data in recent days have corroborated the Fed’s confidence that inflation has moderated significantly. On Friday, futures markets raised the odds that the Fed will cut interest rates by half a percentage point instead of a quarter point, after markets had favored the smaller cut earlier in the week.

The S&P 500 closed at 5,626.02 points, up 0.5 percent on the day and more than 4 percent on the week. The Dow Jones Industrial Average rose 0.7 percent to 41,393.78 points, while the tech-heavy Nasdaq Composite Index gained 0.7 percent to 17,683.98 points.

European stocks:

European stocks ended the week on a positive note, supported by technology, property and mining shares, while investors shifted their attention to the US Federal Reserve ahead of long-awaited monetary easing at its meeting next week.

The pan-European STOXX 600 index rose 0.7% to 515.75 points on the day, though it posted gains of more than 1% on the week.
German stocks outperformed their European peers with a rise of almost 1%, boosted by a rise in shares of Siemens Energy and SAP. France’s CAC 40 rose 0.4% after consumer prices in the region’s second-largest economy rose 2.2% year-on-year in August, in line with its preliminary reading.

Technical view:

The Nifty consolidated on Friday and closed the day with a loss of 32 points amid a choppy move. A small negative candlestick with a small lower shadow was formed on the daily chart. Technically, such range-bound moves following pronounced uptrends are considered as respite patterns and are considered as continuation patterns of the uptrend, according to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

“On the weekly chart, the Nifty moved up and engulfed the previous week’s long bearish candle, thereby negating the bearish engulfing pattern of the previous week. This is a positive move and normally such negations of the bearish pattern result in further upside,” Shetti said.

“The short-term trend of Nifty remains positive. A sustainable move above 25,400 levels could take Nifty towards the next upside of around 25,800 in the near term. The immediate support lies at 25,200 levels,” he added.

Stocks showing bullish bias:

The Moving Average Convergence Divergence Momentum Indicator (MACD) showed bullish signals for Nuvama Wealth Management, Gravita India, Info Edge, Kaynes Technology, Thangamayil Jewellery, Piramal Enterprises, Ceat and 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. Conversely, when the MACD crosses below the signal line, it suggests a possible bearish movement.

Actions that indicate weakness in the future:

The MACD showed bearish signals for Ajanta Pharma, Eris Lifesciences, Jubilant Industries, IIFL Securities, P&G Health, Concord Control Systems, TechNVision Ventures and others. The bearish crossover in the MACD for these stocks suggests that they may have just started their downward trajectory.

Most active stocks in terms of value:

Among the most active stocks on the NSE in terms of value are Patanjali Foods (Rs 2,618 crore), Kalyan Jewellers (Rs 2,336 crore), Zomato (Rs 2,280 crore), HDFC Bank (Rs 1,984 crore), Bajaj Finance (Rs 1,668 crore), Granules India (Rs 1,439 crore) and Tata Motors (Rs 1,313 crore), among others. Higher activity in terms of value can help identify stocks with the highest trading volumes for the day.

Most active stocks in terms of volume:

Among the most traded stocks in the session on the NSE were Vodafone Idea (Rs 19.8 crore shares traded), YES Bank (Rs 10.5 crore shares traded), Suzlon Energy (Rs 8.2 crore shares traded), Zomato (Rs 8.2 crore shares traded), IDBI Bank (Rs 7.7 crore shares traded), Tata Steel (Rs 5.4 crore shares traded) and Samvardhana Motherson International (Rs 3.3 crore shares traded), among others.

Stocks showing buying interest:

Shares of Jubilant Pharmova, Godfrey Phillips, Home First Finance, OFSS, Piramal Enterprises, Century Textiles and Blue Star, among others, witnessed strong buying interest from market participants as they hit fresh 52-week highs, indicating bullish sentiment.

Stocks see selling pressure

No major stocks hit their 52-week lows on Friday.

Bullish sentiment meter

Overall, market breadth favored the bulls, with 2,454 stocks ending in the green and 1,517 stocks closing 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)