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Ahead of Market: 12 things that will decide stock action today

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NEW DELHI: As investors await the results of a Federal Reserve policy meeting before making any major new bets, Asian stocks were trading mixed on Tuesday morning. The S&P 500 and Nasdaq eked out record high finishes on Monday.

At 7 hours (IST), Nifty futures on the Singapore Exchange traded 3 points lower signalling a likely flat start for Dalal Street.

Let’s have a look at the key factors influencing market mood this morning.

S&P 500, Nasdaq hit record closing peaks on eve of Fed meeting

The S&P 500 and Nasdaq eked out record high finishes on Monday, despite most traders being focused on this week’s Federal Reserve meeting and not on adding to existing positions. The Dow Jones Industrial Average fell 85.85 points, or 0.25%, to 34,393.75, the S&P 500 gained 7.71 points, or 0.18%, to 4,255.15 and the Nasdaq Composite added 104.72 points, or 0.74%, to 14,174.14.

Asian stocks trade mixed
Asian stocks traded mixed Tuesday after their U.S. peers closed at a record and a bond rally stalled ahead of a key Federal Reserve meeting. Japanese shares rallied, with the broad Topix index hitting a two-month high, as property shares extended their gains while technology and growth-oriented firms enjoyed a boost from strong gains in the Nasdaq. Australian stocks outperformed after a holiday. Benchmarks in Hong Kong and China slipped as they too reopened after a break.

F&O: Lower volatility indicates bull market bias
India VIX moved up 4.36% from 14.10 to 14.71 level. The fear gauge is gradually falling since the last six consecutive weeks and has come to a level last seen in February 2020 when it had hit higher levels. Lower volatility indicates a bullish market bias, but a spike in volatility might give the market volatile swings even after being at lifetime highs. On the options front, maximum Put Open Interest stood at 15,500 levels followed by 15,000 while maximum Call OI was seen at 16,000 followed by 16,500 levels. Minor Call writing was seen at 15,800 and then 16,200 levels, while there was minor Put writing at 15,500 and 15,700 levels. Options data suggested an immediate trading range between 15,500 and 16,000 levels.

Tech View: Nifty upside looks limited
Nifty50 on Monday topped the much-awaited 15,800 mark on a closing basis. The index formed a small bearish candle with a long lower wick, suggesting that the intraday fall got bought into. Going ahead, Nifty may face immediate resistance near the 15,850-15,900 range, while support may come in between 15,750 and 15,650 levels, analysts said. “Despite a 200-point recovery intraday, the advance-decline ratio remained skewed in favour of the bears. Considering the overall technical picture across time frames, upsides from the current levels appear to be limited,” said Mazhar Mohammad at Chartviewindia.in.

Check out the candlestick formations in the latest trading sessions

E54ETMarkets.com


Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Steel Authority, Marksans Pharma, Tata Motors,

Rico Auto Industries

, FDC, Sunflag Iron, Lasa Supergenerics, Filatex India, CARE Ratings, BEML, ICICI Securities, Srikalahasthi Pipes, Dhanuka Agritech, Dr. Reddy’s Labs, Tata Metaliks, MSP Steel & Power, Bombay Burmah, Hercules Hoists, JMC Projects, GlaxoSmithKline Pharma, Somany Ceramics, Kalyani Steel, Force Motors, Chemfab Alkalis, Visa Steel, and P&G Hygiene & Health.

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 Adani Ports & SEZ, GAIL (India), Indian Oil Corp,

Hindustan Petroleum

, Bharat Petroleum, Kotak Mahindra Bank, HDFC, Aditya Birla Capital, HBL Power Systems, Walchandnagar, Elecon Engineering, Voltas, Aegis Logistics, Hikal, Anant Raj, Tribhovandas Bhimji, The New India Assurance,Gabriel India, KEI Industries, JK Lakshmi Cement, Taj GVK Hotels, Syngene International, UltraTech Cement, Hindustan Aeronautic, Shankara Building, Dredging Corporation, Chalet Hotels, ABB India, TCI, SORIL Infra Resource, Adani Power, Atul, Ambika Cotton Mi, BSL, Ashiana Housing, TCI Express, Ravi Kumar Distiller, Mazda, DB (International),

Kirloskar Industries

, JSW Holdings and Naga Dhunseri Group. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Adani Ports SEZ (Rs 6,552.43 crore), Adani Enterprises (Rs 5,975.15 crore), RIL (Rs 2,094.50 crore), Tata Steel (Rs 1,869.31 crore), Bajaj Finance (Rs 1,620.15 crore), SAIL (Rs 1,464.58 crore), Indiabulls Housing Finance (Rs 1,438.92 crore), Tata Motors (Rs 1,350.53 crore), SBI (Rs 1,279.29 crore) and BHEL (Rs 1,260.20 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.

Monday’s most active stocks in volume terms
JP Power (Shares traded: 19.41 crore), PNB (Shares traded: 19.22 crore), BHEL (Shares traded: 18.83 crore), Reliance Communication (Shares traded: 16.28 crore), Alok Industries (Shares traded: 16.25 crore), YES Bank (Shares traded: 15.73 crore), Vodafone Idea (Shares traded: 12.72 crore), Future Consumer (Shares traded: 11.94 crore), JP Associates (Shares traded: 11.01 crore) and SAIL (Shares traded: 10.76 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Anupam Rasayan, Bajaj Finance, Dr. Reddy’s Laboratories, FDC, eClerx Services, Indiabulls Housing Finance, ICICI Securities, NELCO, Rajesh Exports, Sumitomo Chemical and Endurance Technology witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
OCL Iron and Steel, STI India and

Zicom Electronic Security

witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bears
Overall, the market breadth remained in favour of the bears. As many as 190 stocks on the BSE500 index settled the day in the green, while 306 settled the day in the red.

Podcast: How should investors position themselves in a volatile market >>>
Market is becoming volatile as it logs fresh closing highs on a closing basis. How should investors position themselves in such times? Will the FOMC outcome be positive for the markets? What are the Nifty and Bank Nifty charts suggesting?

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