Ahead of Market: 10 things that will decide stock action on Monday

Amid easing inflation and a weaker dollar, Indian indices ended Friday’s session on a positive note. Nifty at the close settled with gains of 98 points at 17,957, while Sensex ended 303 points higher at 60,261. Broader markets, however, underperformed in today’s session, with Nifty Midcap 100 index ending with a marginal drop.

Here’s how analysts read the market pulse:

“For the last few weeks, the index is trading above the 20-WMA, which has resulted in a triangle pattern formation on the daily chart. After a recent base formation near the lower end of the pattern, Nifty witnessed smart recovery on January 13. Going ahead, 18000-18050 will be the key area beyond which the index will be set for a larger up move. On the downside, 17800 will continue to provide cushion for the index,” Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by

, said.

“The recent recovery in the global markets has failed to impress the participants so far. However, the mood might change if they manage to sustain the gains. To regain some strength, Nifty should decisively cross the 18,100 mark. Meanwhile, participants should restrict positions and prefer a hedged approach,”Ajit Mishra, VP – Technical Research, Religare Broking said.

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

US market

Stocks closed higher on Wall Street on Friday as earnings reporting season got underway and CEOs began to show how well or poorly they’re navigating high inflation and a slowing economy.
The S&P 500 rose 0.4% Friday after erasing an earlier loss. The benchmark index closed out its best week in two months. The Nasdaq and the Dow also rose.
Stocks of several big banks rose following their earnings reports after shaking off morning losses. Tesla fell after cutting prices on its cars.

European shares
European shares edged up on Friday, hovering near a nine-month high, as healthcare stocks rose and the British economy unexpectedly grew in November, with investors awaiting earnings from big U.S. banks.

The pan-regional STOXX 600 gained 0.2% by 0811 GMT, while the UK’s FTSE 100 added 0.4% after data showed the British economy eked out 0.1% growth in November.

European shares were headed towards a second straight weekly gain, in an upbeat start to January and the new year, after data signalled a slowdown in inflation in the euro zone and the United States, which could allow central banks to slow the pace of their monetary policy tightening.

Tech View: Positive candle
A reasonable positive candle was formed on the daily chart with upper and lower shadow. Technically, this pattern indicates a reversal on the upside. The formation of upper and lower shadows signal high volatility in the market.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of

, , and Infosys among others.

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 signaling weakness ahead
The MACD showed bearish signs on the counters of Power Finance,

, and among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
RIL (Rs 2336 crore), Infosys (Rs 1737 crore), ICICI Bank (Rs 972 crore) and

(Rs 931 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 highest trading turnovers in the day.

Most active stocks in volume terms
Yes Bank (Shares traded: 17.79 crore), PNB (Shares traded: 9.88 crore),

(8.11 crore), and IRFC (Shares traded: 7.53 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of

, , Archean Chemical Industries, and witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Shares of Bata India, , , Laurus Labs and Delhivery among others hit their 52-week lows on Tuesday, which signals bearish sentiment on the counter.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 1,559 stocks ended in the red while 1,929 names settled with gains.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)