nifty technical analysis: Ahead of Market: 10 things that will decide D-Street action on Tuesday

Equity benchmarks Sensex and Nifty were on a roll on Monday, soaring to fresh life-time closing highs for the third successive session. The 30-share index crossed the historic 65,000 mark on strong foreign fund flows and a rally in global equities. Hectic buying in index majors Reliance Industries, ITC and HDFC twins also added to the momentum, traders said.

Rallying for the fourth straight session, the 30-share BSE Sensex jumped 486.49 points or 0.75% to settle at its all-time closing high of 65,205.05. Nifty settled at 19,323, up 0.7% or 133. Meanwhile, sector-wise PSU Bank pack emerged as the top performer, while pharma saw the most cut.

Here’s how analysts read the market pulse:

“Sentiments of investors are reinforced by positive domestic data and optimistic global cues. Global market was supported by resilient economic data, avoiding the possibility of a recession. India’s stock market trend was broad-based, owing to the outperformance from energy, financial, metal, and FMCG sectors. Economic activities are gaining strength with PMI level enlarging to 57.8, indicating sustained demand for products, fostering a sense of confidence in the manufacturing prospects,” said Vinod Nair, Head of Research at Geojit Financial Services.

“Remarkably, the Nifty has been consistently achieving higher highs for 14 consecutive weeks. In order for this upward trend to continue, it is crucial for the Nifty to maintain levels above 19,250, which could pave the way for further advances towards 19,450 and 19,550 levels. On the downside, support is expected at 19,200 and 19,100 levels, Ameya Ranadive CMT, CFTe Equity Research Analyst, Choice Broking, said.

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

US market
The tech-heavy Nasdaq started the new quarter on a firm footing on Monday, as Tesla shares rose after the electric-vehicle maker reported record second-quarter vehicle deliveries. Tesla gained 7.4% to hit a nine-month high, a day after its car deliveries topped market estimates on the back of incentives and steeper discounts.

At 10:15 a.m. ET, the Dow Jones Industrial Average was down 39.04 points, or 0.11%, at 34,368.56, the S&P 500 was up 0.32 points, or 0.01%, at 4,450.70, and the Nasdaq Composite was up 30.79 points, or 0.22%, at 13,818.71. U.S. manufacturing slumped further in June, according to a survey, reaching levels last seen when the economy was reeling from the initial wave of the COVID-19 pandemic in May 2020.

European shares
European shares erased gains by the closing bell to finish lower on Monday as AstraZeneca led falls among healthcare stocks that outweighed gains by Generali and among miners buoyed by hopes of more policy stimulus from China.

The pan-European STOXX 600 index dipped 0.2%, reversing gains of some 0.4%, to kick off the first day of the second half of the year on the back foot.

Shares of British drugmaker AstraZeneca plunged 8.0%, clocking its worst day since March 2020 after as analysts said the benefits from its experimental lung cancer drug may not be as pronounced as hoped. The broader healthcare index fell 2.0%, leading falls among sectors.

Tech View: Long bull candle
A long bull candle was formed with a gap up opening. Unfilled gaps were observed in the last three sessions, which is signaling a bullish run away gaps. Normally, such bullish runaway gaps are formed in the middle of the trend.

“Though, Nifty placed at the all time highs, still there is no indication of any reversal building up at the higher levels. The crucial overhead resistance comes around 19,500 and next 19,800 levels, which are 1.236% and 1.382% Fibonacci projections, taken from the bottom-top-bottom swings as per weekly timeframe chart. Immediate support is at 19200 levels,” Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Suzlon Energy, PNB, South Indian Bank, Bank of Baroda, IDBI Bank and RBL Bank, 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 NHPC, Nykaa, Surya Roshni, Cipla and PTC India 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
HDFC Bank (Rs 3822 crore), HDFC (Rs 2023 crore), RIL (Rs 1456 crore) and ICICI Bank (Rs 1614 crore) and Infosys (Rs 1033 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
Suzlon Energy (Shares traded: 38.99 crore), Reliance Power (Shares traded: 22.35 crore), Vodafone Idea (Shares traded: 11.37 crore) and YES Bank (Shares traded: 10.83 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Suzlon Energy, FACT, IDFC, Radico Khaitan and Jindal Saw among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Gammon Infra, Jet Airways, Viji Finance and Cell Point (India) hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 1,721 stocks ended in the red, while 1,972 names settled in the green.

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

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