NEW DELHI: As Nifty ended the Monday’s volatile session marginally higher, it formed a DragonFly Doji candle on the daily chart indicating that declines are being bought.
Chandan Taparia of Motilal Oswal Financial Services said Nifty has again got stuck in broader range and requires to hold above 11450-11500 zones to get the bullish stance for a move towards 11750-11800 zones, while on the downside, immediate support exists at 11250-11200 zones.
Vinod Nair of Geojit Financial Services said virus infections continued to rise unabated and this fear combined with a sell off seen in the US markets, in the previous trading session, served to bring in doubts regarding the continuation of the momentum seen in recent times in the market.
“Investors would do well to stay nimble, watch global sentiments and trade cautiously,” he said.
Ajit Mishra of Religare Broking said considering the market scenario, traders should maintain positions on both sides and prefer hedged bets.
“We feel the performance of global markets combined with development on India-China LAC issue will continue to dictate the market trend,” he said.
That said here’s a look at what some of the key indicators are suggesting for Tuesday’s action:
US stocks cloed for holiday; futures fall 1%
World shares inched higher led by Europe on Monday, after last week’s rout in US technology stocks that saw $2.3 trillion in value wiped off in two days with investors taking note of lofty valuations when the global economy is still in a recession. Market activity was likely to remain subdued for the rest of the day with the US closed for the Labor Day holiday, though Nasdaq futures fell a further 1%.
European shares kick of week on strong footing
European shares bounced on Monday after a Wall Street-led rout in technology stocks kept global sentiment subdued in the previous week, with investors keeping a close watch on COVID-19 vaccine developments. The STOXX 600 index was 1% higher, with Frankfurt shares leading gains after rising 1.2%.
Tech View: Nifty has support at 11,250 level
Nifty50 on Monday closed almost where it opened, forming a Dragonfly Doji candle on the daily chart. The day saw weakness on the index being bought into on several occasions. Analysts said the index may stay rangebound with a positive bias in the coming sessions. A rise above the 11,407 level, which is the index’s 20-day moving average, could show initial sign of strength, they said. Support for the index is seen in the 11,200-250 range, they added.
Check out the candlestick formations in the latest trading sessions
F&O: Drop in VIX could provide some stability
India VIX fell 0.64 per cent to 22 level. A cool-off in VIX after previous week’s spike could give some sort of stability and a bullish to rangebound view point to the broader market. Options data suggested a wider trading range between 11,100 and 11,600 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Monday showed bullish trade setup on the counters of Infibeam Avenues, Just Dial, TV Today Network, Pfizer, Dixon Technologies, JBF Industries, Hester Biosciences, Compuage Infocom, Anjani Portland, RS Software (India), CL Educate, WABCO India and Repro India.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of SBI, Axis Bank, PVR, Century Textiles, Bank of India, Indiabulls Ventures, Deepak Nitrite, Hikal, Orient Electric, Sakuma Exports, ICICI Securities, PNC Infratech, Arvind Fashions, Tribhovandas Bhimji, Future Lifestyle, Astec Lifesciences L, AIA Engineering, GOCL Corporation, Arshiya, Banswara Syntex, PSP Projects and CIL Nova Petrochemicals among others.
Monday’s most active stocks
RIL (Rs 2096.18 crore), Vodafone Idea (Rs 1735.68 crore), Bajaj Finance (Rs 1649.48 crore), Tata Motors (Rs 1236.57 crore), Bharti Infratel (Rs 1234.99 crore), Axis Bank (Rs 1192.47 crore), TCS (Rs 1071.55 crore), HDFC Bank (Rs 977.30 crore), Maruti Suzuki (Rs 972.72 crore) and ZEEL (Rs 951.21 crore) were among the most active stocks on Dalal Street on Monday in value terms.
Monday’s most active stocks in volume terms
Vodafone Idea (shares traded: 136.88 crore), YES Bank (shares traded: 8.60 crore), Tata Motors (shares traded: 8.26 crore), Bharti Infratel (shares traded: 5.47 crore), Tata Motors (shares traded: 5.17 crore), ZEEL (shares traded: 4.30 crore), Ashok Leyland (shares traded: 3.74 crore), SBI (shares traded: 3.57 crore), IDFC First Bank (shares traded: 3.27 crore) and ITC (shares traded: 3.26 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
AstraZeneca, IndiaMART InterMESH, Granules India, Dixon Technologies (India) and WABCO India witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Monday signalling bullish sentiment.
Stocks seeing selling pressure
Blue Chip India, Max India and Silly Monks Entertainment witnessed strong selling pressure in Monday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, market breadth remained in favour of bears. As many as 196 stocks on the BSE 500 index settled the day in green, while 301 settled the day in red.
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Domestic benchmark indices ended a volatile session with marginal gains, thanks to a late hour rally, snapping two-day losing streak on Monday. TCS, HDFC, HUL and ITC led the gains, while selling in HDFC Bank, Bajaj Finance and M&M capped the upside. Overall, Sensex closed 60 points higher at 38,417, while Nifty gained 21 points to 11,355. We caught up with AK Prabhakar, Head of Research, IDBI Capital Markets to try and understand the market undercurrent.