Stock market action: Waiting for the market: 10 factors that will decide the stock market action on Tuesday

India’s benchmark stock indices recouped most of early losses to close marginally lower in a volatile market on Monday, largely shrugging off concerns raised by a new Hindenburg report alleging misconduct by SEBI chief Madhabi Puri Buch.

The BSE benchmark index Sensex The broader NSE Nifty index fell 20.5 points or 0.08 per cent to close at 24,347.

This is how analysts read the market pulse:

“The sentiment is sideways to weak with the index closing below the 21-day EMA. The RSI is in a bearish crossover, indicating weak momentum. The market might continue to sell on the upside as long as it remains below 24,500. On the lower end, support is placed at 24,150,” said Rupak De, Senior Technical Analyst at LKP Securities. Sharekhan’s Jatin Gedia said, “On the daily charts, we can observe that Nifty has been in a counter-trend pullback after a drop of 1200 points. On the upside, the pullback can occur up to 24520 – 24650, where the 50% and 61.82% Fibonacci retracement levels of the drop are located. The immediate support on the downside is placed at 24210.”

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

US Market:

Wall Street’s major indexes fell slightly on Monday as investors held off on moving forward in anticipation of key economic data due later in the week, particularly U.S. consumer prices. Eight of the 11 S&P sectors fell, led by housing and consumer discretionary. Tesla fell more than 1%, contributing to losses for mega-cap and growth stocks. Despite recouping most of the losses from last week’s sharp drop, investors are cautious ahead of Wednesday’s CPI report and Thursday’s retail sales figures. The CBOE Volatility Index rose slightly but remains well below recent highs.Technical view: Doji candle

Nifty closed Monday’s trading session 20.5 points lower to form a Doji candle on the daily chart and indicate an indecisive mood on Dalal Street.

Overall, Nifty continues to trade in the range of 24,000-24,400 levels for the past few days and we need to wait and watch for a breakout or a breakdown on either side to determine any major direction in Nifty. Support for the index is now seen at 24,200 and 23,950-24,000 levels. On the upside, the immediate resistance zone for Nifty is at 24,350-400 levels and the next resistance is at 24,550 levels, said Tejas Shah, Technical Research, JM Financial & BlinkX.

Actions that show bullish bias:

The Moving Average Convergence Divergence (MACD) momentum indicator showed bullish trading on the counters of Gillette India, Trent, AIA Engineering, Orchid Pharma, Bharat Rasayan, Affle India and Pitti Engineering, 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 Divi’s Laboratories, Suven Pharma, Adani Energy Solutions, Sapphire Foods, and Mastel, among others. The bearish crossover of the MACD on these counters indicated that they had just started their bearish journey.

Most active stocks in terms of value:

RVNL (Rs 3,493 crore), HDFC Bank (Rs 3,272 crore), Adani Enterprises (Rs 3,196 crore), Voltas (Rs 2,178 crore), Adani Power (Rs 1,892 crore), Inox Wind (Rs 1,819 crore) and Adani Ports (Rs 1,382 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 higher trading volumes on the day.

Most active stocks in terms of volume:

Vodafone Idea (shares traded: Rs 29 crore), SI Bank (Shares traded: 20.8 crore), Suzlon Energy (Shares traded: 13 crore), HFCL (Shares traded: 9.7 crore), Inox Wind (Shares traded: 9.2 crore), IRFC (Shares traded: 6.4 crore) and RVNL (Shares traded: 6.2 crore), among others, were among the most traded stocks in the session on NSE.

Stocks showing buying interest:

Shares of Inox Wind, Voltas, Glenmark Life, Jubilant FoodWorks, HFCL, Welspun Corp and Bikaji Foods 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:

Equitas Small Finance Bank shares hit their 52-week lows, indicating bearish sentiment on the counters.

Sentiment meter favors bears:

Overall, market breadth favored the bears as 2,187 stocks ended in the red, while 1,899 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)