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

Indian equity benchmark indices ended in the green on Thursday despite weak global market cues. Sensex rallied 0.6% or 385 points to settle the day at 66,265, while Nifty climbed over 100 points or 0.6% to close at 19,727. A sharp uptick was visible across the board, especially in the banking pack. Additionally, stocks from the realty and media sectors participated in the rally, while profit booking was observed in the FMCG and pharma sectors.

Here’s how the analysts read the market pulse:

“The domestic market initially opened with lackluster performance, influenced by weak global cues. However, as the day progressed, a decline in U.S. bond yields and crude oil prices injected some positivity into the market. This optimism was most prominent in banking stocks. Interestingly, mid and smallcap stocks managed to retain investor interest even though their valuations are relatively high. Nonetheless, the persistently weak trade data from China continues to cast a shadow over the global market outlook,” said Vinod Nair, Head of Research at Geojit Financial Services.

“Nifty successfully cleared the short-term resistance of 19650 and post-breakout, it intensified the positive momentum. Higher bottom formation on intraday charts and bullish candle on daily charts support further uptrend from the current levels. We are of the view that 19650 would be the key level to watch out for, and above the same, the index could move up till 19800-19825. On the flip side, below 19650, the uptrend would be vulnerable,” commented Shrikant Chouhan, Head of Research (Retail), Kotak Securities.

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

US market
The S&P 500 and Nasdaq fell on Thursday with Apple leading declines in megacap growth stocks on concerns over China’s iPhone curbs, while weaker-than-expected jobless claims data stoked worries about sticky inflation.

Apple dropped 3.6% on news that China has widened curbs on the use of iPhones by state employees, requiring staff at some central government agencies to stop using their mobile phones at work.At 9:38 a.m. ET, the Dow Jones Industrial Average was up 14.26 points, or 0.04%, at 34,457.45, the S&P 500 was down 26.88 points, or 0.60%, at 4,438.60, and the Nasdaq Composite was down 193.72 points, or 1.40%, at 13,678.75.

Helping keep the Dow afloat, McDonald’s rose nearly 1% after Wells Fargo upgraded the stock to “overweight”.

European shares
European shares fell for a seventh consecutive session on Thursday, on track for their longest losing streak in more than five years, weighed down by twin concerns of a slowing European economy and elevated U.S. interest rates.

The pan-European STOXX 600 index fell 0.4% by 0714 GMT, hitting a one-week low. The seven-day losing streak for the index was last seen in February 2018.

Tech View: Long bull candle
Nifty on Thursday surpassed the immediate resistance of 19650 levels to close 116 points higher and formed a long bull candle on the daily chart. The overall chart pattern is indicating a larger upside breakout of the broader consolidation/triangle pattern of the last 5 weeks, opening a potential pattern upside target for Nifty around 20,000-20200 levels over the next couple of weeks. Any intra-week dips down to 19550-19600 levels could be a buy on dips opportunity.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of J&K Bank, ICICI Bank, L&T, Mazagon Dock Shipbuilders, and Tata Motors 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 TV18 Broadcast, NCC, Jai Corp, M&M, and Polycab 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
MRF (Rs 109290 crore), Page Industries (Rs 42111 crore), Honeywell Automation (Rs 39150 crore), 3M India (Rs 32221 crore), and Shree Cements (Rs 25701 crore), among others, 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 the highest trading turnovers in the day.

Most active stocks in volume terms
JP Power (Shares traded: 60.75 crores), Vodafone Idea (Shares traded: 27.76 crore), YES Bank (Shares traded: 23.07 crore), IRFC (Shares traded: 20.25 crores), and Suzlon Energy (Shares traded: 17.07 crore), among others, were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Cochin Shipyard, JP Power, J&K Bank, TVS Supply Chain, and Mazagon Dock Shipbuilders, 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 Redtape, GNA Axles, Penta Gold, and Atam Valves, among others, hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favors bulls
Overall, market breadth favored bulls as 2,198 stocks ended in the green, while 1,490 names settled in the red.

(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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