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

Indian shares logged third straight weekly gains on Friday, led by financials, while the ce ntral bank kept a key policy rate unchanged, as expected. Both the Nifty and S&P BSE Sensex added about 0.8% each for the week.

Financial services, the highest weighted sub-index, gained 2.70% this week, its best in four months, led by a rise in top private lender HDFC Bank after it posted a sequential growth in deposits in the March quarter.

Here’s how analysts read the market pulse:

“The index has remained sideways throughout the session, reflecting a pause in the market trend following the formation of a hanging man pattern. The sentiment may continue to remain sideways due to the lack of a directional breakout or pattern formation. At the higher end, 22650 might prove to be a crucial resistance level. A fresh rally is not anticipated as long as the index remains below 22650. On the lower end, support is evident at 22300; if breached, the index might decline towards the 22000-21900 range,” said Rupak De, Senior Technical Analyst, LKP Securities.

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said, “The near-term trend of Nifty remains positive and the ongoing range movement in the market is suggesting a possibility of sharp swing movement on either side. Hence a range expansion could be watched around 22600 and 22300 levels on either side. Therefore, a decisive move above 22600 levels could bring quick upside towards 22800 levels and a slide below 22300 levels is likely to open fresh round weakness from the highs.”

That said, here’s a look at what some key indicators are suggesting for Monday’s action:US market End in Green
US stocks finished higher on Friday after a strong jobs report reinforced the view that the economy remains healthy even as it suggested the Federal Reserve could delay cutting interest rates. All major S&P 500 sectors advanced, with communication services, industrials and technology the top gainers.European Shares at 2-week Low:
European stocks fell to a more than two-week low on Friday, tracking a global skittishness in sentiment following hawkish comments from some U.S. Federal Reserve officials and a spike in tensions in the Middle East. The continent-wide STOXX 600 fell 1.2%, on track for its worst day since mid-October 2023. Benchmark indexes across all major European economies such as Germany, France, Italy and Spain also fell over 1% each.

Tech View:
The Nifty 50 ended flat at 22513 points, and on daily charts, it suggests that the index is consolidating after a sharp run-up, which is a healthy sign.

“We expect the consolidation to breakout on the upside and thus minor degree corrections should be bought into. On the upside, we expect levels of 22700 which is the upper end of the rising channel. On the downside crucial support is placed at 22400–22350,” said Jatin Gedia, technical analyst at Sharekhan by BNP Paribas.

Stocks Showing Bullish Bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Alkyl Amines and FDC 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 IIFL Finance, Aavas Financiers, NBCC, NCC, IRB Infra Developers, and Safari Industries 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 4,563 crore), ICICI Bank (Rs 1,647 crore), Kotak Bank (Rs 1,160 crore), RIL (Rs 1,088 crore), Axis Bank (Rs 971 crore), Bajaj Finance (Rs 863 crore), and SBI (Rs 755 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 highest trading turnovers in the day.

Most Active Stocks in Volume Terms
Tata Steel (Shares traded: 4.4 crore), HDFC Bank (Shares traded: 2.9 crore), ITC (Shares traded: 1.6 crore), ICICI Bank (Shares traded: 1.5 crore), ONGC (Shares traded: 1.3), NTPC (Shares traded: 1.1 crore ), and SBI (Shares traded: 99 lakh) among others were among the most traded stocks in the session on NSE.

Stocks Showing Buying Interest
Shares of NCC, Sun Pharma Advanced Research Company, Policy Bazar, Apar Industries, Jio Financial Services, Ipca Labs, and Vedanta among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks Seeing Selling Pressure
No major stocks hit their 52-week low on Friday.

Sentiment Meter Favours Bulls
Overall, market breadth favoured bulls as 2,394 stocks ended in the green, while 1,460 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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