AgenciesNEW DELHI: The market continues to be under pressure amid soaring inflation and sell-off in shares globally. Analysts believe this is the right time to pick quality stocks at cheap valuation.
Here's how analysts read the market pulse:
Shrikant Chouhan of Kotak Securities said the Nifty50 has formed a double top formation on intraday charts, and on daily charts it has formed 'Hammer' candlestick formation that is broadly negative.
"The 16,400 level proved to be a strong barrier yet another time. The hourly chart shows that the upper end of an upward sloping channel also created pressure near 16,400. The overall structure shows that the Nifty50 is likely to witness sideways action in the short term. The 16,000-16,400 is expected to be the range for the next few sessions," said Gaurav Ratnaparkhi at Sharekhan.
That said, here’s a look at what some key indicators are suggesting for Tuesday’s action:
S&P 500, Dow rise as banks, Apple offer support
The S&P 500 and the Dow rose on Monday, led by gains in banks and Apple after a sharp selloff last week, while a slide in Tesla and chipmakers weighed on the tech-heavy Nasdaq.
Eight of the 11 major S&P sectors advanced in early trading, with financials and energy up more than 1% each.
Banks gained 2.9%, led by a 3.5% jump in shares of JPMorgan Chase & Co after the biggest U.S. lender by assets lifted its 2022 outlook for net interest income.
At 10:04 a.m. ET, the Dow Jones Industrial Average was up 271.16 points, or 0.87%, at 31,533.06 and the S&P 500 was up 13.44 points, or 0.34%, at 3,914.80.
The Nasdaq Composite was down 37.56 points, or 0.33%, at 11,317.06, dragged down by Tesla Inc, Nvidia Corp and Amazon.com.
European shares end higher
European shares ended decidedly higher on Monday as an unexpected rise in German business morale underscored the resilience of the region's largest economy, while wind turbine maker Siemens Gamesa jumped on a takeover offer.
After rising as much as 1.3% earlier in the day, the pan-European STOXX 600 index ended 1.3% higher. German shares rose 1.4%.
Commodity-linked stocks gained about 2% on the back of higher oil and base metal prices, while banks rose 2.3%.
Tech View: Bearish candle
Nifty50 formed a bearish candle on the daily chart with an upper wick, suggesting selling at higher levels. During the day, the index tested the 16,400 level.
F&O: Support at 16,000
“16,000 put and 16,500 calls have seen a fair amount of option writing. Thus, Nifty current week trading range is 16,000-16,500,” said Mehul Kothari, AVP - Technical Research, Anand Rathi Shares & Stock Brokers.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of , , JSW Energy, , and .
The MACD is known for signaling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of , UPL, , , and Equitas SFB. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.
Most active stocks in value terms
Tata Steel (Rs 2818 crore), (Rs 1842 crore), HDFC Bank (Rs 1285 crore), ICICI Bank (Rs 1252 crore), Jindal Steel (Rs 1175 crore), LIC (Rs 1032 crore) and Paytm (Rs 982 crore) were among the most active stocks on NSE in value terms. Higher activity on a counter in value terms can help identify the counters with the highest trading turnovers in the day.
Most active stocks in volume terms
(Shares traded: 13 crore), YES Bank (Shares traded: 12 crore), SAIL (Shares traded: 11 crore), GTL Infra (Shares traded: 6 crore), BHEL (Shares traded: 6 crore) and (Shares traded: 5 crore) were among the most traded stocks in the session on NSE.
Stocks showing buying interest
EaseMyTrip, HAL, and MRPL stocks witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
JSW Steel, Tata Steel, NMDC, SAIL, , and Lupin witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.
Sentiment meter favours bears
Overall, market breadth favoured losers as 1,373 stocks ended in the green, while 2,048 names settled with cuts.
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Here's how analysts read the market pulse:
Shrikant Chouhan of Kotak Securities said the Nifty50 has formed a double top formation on intraday charts, and on daily charts it has formed 'Hammer' candlestick formation that is broadly negative.
"The 16,400 level proved to be a strong barrier yet another time. The hourly chart shows that the upper end of an upward sloping channel also created pressure near 16,400. The overall structure shows that the Nifty50 is likely to witness sideways action in the short term. The 16,000-16,400 is expected to be the range for the next few sessions," said Gaurav Ratnaparkhi at Sharekhan.
That said, here’s a look at what some key indicators are suggesting for Tuesday’s action:
S&P 500, Dow rise as banks, Apple offer support
The S&P 500 and the Dow rose on Monday, led by gains in banks and Apple after a sharp selloff last week, while a slide in Tesla and chipmakers weighed on the tech-heavy Nasdaq.
Eight of the 11 major S&P sectors advanced in early trading, with financials and energy up more than 1% each.
Banks gained 2.9%, led by a 3.5% jump in shares of JPMorgan Chase & Co after the biggest U.S. lender by assets lifted its 2022 outlook for net interest income.
At 10:04 a.m. ET, the Dow Jones Industrial Average was up 271.16 points, or 0.87%, at 31,533.06 and the S&P 500 was up 13.44 points, or 0.34%, at 3,914.80.
The Nasdaq Composite was down 37.56 points, or 0.33%, at 11,317.06, dragged down by Tesla Inc, Nvidia Corp and Amazon.com.
European shares end higher
European shares ended decidedly higher on Monday as an unexpected rise in German business morale underscored the resilience of the region's largest economy, while wind turbine maker Siemens Gamesa jumped on a takeover offer.
After rising as much as 1.3% earlier in the day, the pan-European STOXX 600 index ended 1.3% higher. German shares rose 1.4%.
Commodity-linked stocks gained about 2% on the back of higher oil and base metal prices, while banks rose 2.3%.
Tech View: Bearish candle
Nifty50 formed a bearish candle on the daily chart with an upper wick, suggesting selling at higher levels. During the day, the index tested the 16,400 level.
F&O: Support at 16,000
“16,000 put and 16,500 calls have seen a fair amount of option writing. Thus, Nifty current week trading range is 16,000-16,500,” said Mehul Kothari, AVP - Technical Research, Anand Rathi Shares & Stock Brokers.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of , , JSW Energy, , and .
The MACD is known for signaling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of , UPL, , , and Equitas SFB. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.
Most active stocks in value terms
Tata Steel (Rs 2818 crore), (Rs 1842 crore), HDFC Bank (Rs 1285 crore), ICICI Bank (Rs 1252 crore), Jindal Steel (Rs 1175 crore), LIC (Rs 1032 crore) and Paytm (Rs 982 crore) were among the most active stocks on NSE in value terms. Higher activity on a counter in value terms can help identify the counters with the highest trading turnovers in the day.
Most active stocks in volume terms
(Shares traded: 13 crore), YES Bank (Shares traded: 12 crore), SAIL (Shares traded: 11 crore), GTL Infra (Shares traded: 6 crore), BHEL (Shares traded: 6 crore) and (Shares traded: 5 crore) were among the most traded stocks in the session on NSE.
Stocks showing buying interest
EaseMyTrip, HAL, and MRPL stocks witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
JSW Steel, Tata Steel, NMDC, SAIL, , and Lupin witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.
Sentiment meter favours bears
Overall, market breadth favoured losers as 1,373 stocks ended in the green, while 2,048 names settled with cuts.
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