Ahead of Market: 12 things that will decide stock action on Monday

NEW DELHI: Nifty50 on Friday formed a smaller bearish candle on the daily chart with a long upper wick, suggesting selling pressure at higher levels. Analysts said the ongoing consolidation in the 15,600-15,900 range is likely to continue this week as well.

Here’s how analysts read the market pulse:-
Gaurav Ratnaparkhi of Sharekhan said Nifty50 may see a brief consolidation near the 15,700-15,850 range before heading towards the 16,000 level on the upside. “From a near-term perspective, the 15,600 level will continue to act as a crucial support on a closing basis,” Ratnaparkhi said.

Mazhar Mohammad of Chartviewindia.in said the 15,900-600 trading range may continue for some time. “The monthly charts have registered two back-to-back indecisive candle formations with a narrow range of 450 points, hinting at pausing momentum,” he said.

That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:

US shares post gains for month
US stocks fell on Friday with Amazon.com shares declining after the company forecast lower sales growth, but the S&P 500 still posted a sixth straight month of gains. The Dow Jones Industrial Average (.DJI) fell 146.36 points, or 0.42%, to 34,938.17, the S&P 500 (.SPX) lost 23.58 points, or 0.53%, to 4,395.57 and the Nasdaq Composite dropped 101.51 points, or 0.69%, to 14,676.76.

European shares log sixth straight month of gains

European stocks fell from record highs on Friday as concerns about the fast-spreading Delta variant and regulatory actions in China outweighed optimism around the quarterly earnings season and an economic recovery. The pan-European STOXX 600 index fell 0.5%, but rose for a sixth straight month in July, its longest winning streak since 2012-13 when it rose for 12 months in a row.

Tech View: Nifty forms smaller bearish candle

Nifty50 on Friday formed a smaller bearish candle on the daily chart with a long upper wick, suggesting selling pressure at higher levels. On the weekly scale, the index formed a Hammer candle, thanks to an intra-week recovery from the low of 15,513. Analysts said the technical charts are unable to send out any clear signal for next week, adding that the ongoing consolidation in the 15,600-15,900 range may continue.

F&O: Falling VIX gives grip to bulls

India VIX fell by 1.06 per cent from 12.94 to 12.80 level. A decline in volatility after the roller-coaster ride of the last session has again given a grip to the bulls, but now VIX has to cool down below 12 zone for more comfort. Options data suggested a broader trading range between 15,500 and 16,000 levels.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Ashok Leyland, IDFC First Bank, Canara Bank,

Sun Pharma Advanced Research

, HCL Technologies, Reliance Industries, NHPC, Adani Enterprises,

Hindustan Oil Exploration

, REC, Max Healthcare Institute, Orient Paper,

Gujarat Pipavav Port

, PVR, Crompton Greaves Consumer, Kothari Petrochem, Godrej Properties, SRF, Voltas, Rupa & Company, Shoppers Stop, KSB, Eris Lifesciences, Solar Industries, Tata Communications, Max India, The Investment Trust, IIFL Wealth Management, TeamLease Services, Refex Industries, Ratnamani Metals, Endurance Technologies, Mold-Tek Packaging, Shriram City Union, Shree Cement, Linde India, Dynamatic Techno and The Grob Tea Company.

The MACD is known for signalling 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

Indiabulls Real Estate

, LT Foods, Arvind, Orient Electric, Indian Energy Exchange, ICICI Pru Life, Equitas Holdings, RPP Infra Projects, Cybertech System, Sandhar Technologies, Sanginita Chemicals,

Hisar Metal Industries

, GSS Infotech, Kopran, Vimta Labs, Deccan Cements, Chembond Chemicals, Sundaram Clayton, Albert David, Seya Industries, Advani Hotels, Oriental Aromatics, Alicon Castalloy, Bafna Pharmaceutical, Gillette India, Kennametal India, The Indian Card Clot and NBI Industrial Finance. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

Sun Pharma (Rs 2,698.78 crore), Tech Mahindra (Rs 2,478.74 crore), Tata Steel (Rs 2,039.42 crore), SBI (Rs 1,529.65 crore), Deepak Nitrite (Rs 1,401.08 crore), Zomato (Rs 1,205.11 crore), SAIL (Rs 1,198.92 crore), SRF (Rs 1,114.59 crore), RIL (Rs 1,073.21 crore) and Ashok Leyland (Rs 1,048.51 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.

Most active stocks in volume terms

Suzlon Energy (Shares traded: 19.15 crore), Vodafone Idea (Shares traded: 11.92 crore), JP Power (Shares traded: 11.69 crore), YES Bank (Shares traded: 9.94 crore), Zomato (Shares traded: 8.83 crore), SAIL (Shares traded: 8.38 crore), Ashok Leyland (Shares traded: 7.83 crore), NALCO (Shares traded: 7.18 crore), BHEL (Shares traded: 6.45 crore) and Trident (Shares traded: 5.80 crore) were among the most traded stocks in the session.

Stocks showing buying interest

Aarti Industries, ACC, Coforge, Fairchem Organics, Sun Pharma Advanced Research, Sun Pharma, SRF and TeamLease Service witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure

Alembic Pharma, Keerti Knowledge and Skills and Suryoday Small Finance Bank witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bulls

Overall, the market breadth remained in favour of the bulls. As many as 285 stocks on the BSE500 index settled the day in the green, while 206 settled the day in the red.

Podcast: Can Nifty take out the 16,000 level in August?

Nifty has been trading in a broad range, unable to cross the 16,000 level for some time. Will Nifty be able to cross this crucial level in August? What do the technical charts suggest? Where is Bank Nifty headed?