Manish Hathiramani, technical analyst at Deen Dayal Investments, said, “What needs to be seen in the coming week is that we do not retest the lows of this week as that could cripple the index. Should that happen, we will slip further to test 14,000.”
“Positive US job data and climb in fourth-quarter US GDP to 4.3 per cent helped to reduce the gravity of the contraction. On the domestic front, high-frequency data suggests good economic activity in Q4FY21 and results will be announced from April. The second wave of Covid and high valuation will maintain volatility in the near term,” said Vinod Nair, Head of Research at Geojit Financial Services.
That said, here’s a look at what some of the key indicators are suggesting for Tuesday’s action:
US stocks open lower on hedge fund default concerns
Wall Street’s main indexes opened lower on Monday after a surge in the previous session, as global banks said they faced potential losses from a hedge fund’s default on margin calls. The Dow Jones Industrial Average rose 0.04% at the open, the S&P 500 fell 0.13% while the Nasdaq Composite dropped 0.26%.
European stocks near record highs on recovery hopes
European stocks edged closer to a record high on Monday on optimism over a global economic recovery, while Credit Suisse tumbled following a warning of “significant” losses from exiting positions after a U.S.-based hedge fund defaulted on margin calls. The pan-European STOXX 600 index rose 0.3% while the export-heavy German DAX rose 0.6% to an all-time high.
Tech View: Nifty’s Harami Cross pattern signals lack of direction
Analysts said multiple parameters on the weekly charts entered ‘sell’ mode, and further buying is required to instill confidence among traders. Chandan Taparia of Motilal Oswal Securities said Friday’s Harami Cross pattern indicated the absence of direction in the market. “The index has to continue to climb and hold above 14,700 level to extend its move towards the 14,900 mark. The immediate support exists at 14,600 and 14500 levels,” Taparia said.
Check out the candlestick formations in the latest trading sessions
F&O: Nifty yet to show any clear trend
India VIX fell 9.03% from 22.69 to 20.65 level. VIX needs to cool down below 20 level for the bullish grip to continue and the market movement to become smoother. Since it is the beginning of a new series, options data lay scattered at different strike prices. On the options front, maximum Put Open Interest stood at 14,000 level followed by 13,500 while maximum Call OI was seen at 15,000 followed by 16,000 levels. Options data suggested an immediate trading range between 14,000/14,200 and 14,800/15,000 zones.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Friday showed bullish trade setup on the counters of Bharti Airtel, Welspun India, Tata Consumer Products, Aditya Birla Fashion, Adani Transmission, CDSL, Birla Corporation, Dalmia Bharat Sugar, Kansai Nerolac Paint, Eris Lifesciences, Nestle India, Amrutanjan HealthCare, TCI Express, TVS Srichakra and Gillette India.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Firstsource Solution, Orient Electric, Coforge, Oberoi Realty, Ajanta Pharma, Persistent Systems, SS Infrastructure, Alicon Castalloy, Websol Energy System, HPL Electric & Power, Ganesh Housing Corp, Sasken Technologies, Nilkamal, Jindal Poly Investment, GRP Ltd and Sejal Glass.
Friday’s most active stocks
Tata Steel (Rs 3,249.74 crore), Tata Motors (Rs 2,398.51 crore), RIL (Rs 1,858.05 crore), SBI (Rs 1,458.30 crore), Bajaj Finance (Rs 1,220.76 crore), ICICI Bank (Rs 1,200.94 crore), TCS (Rs 1,138.41 crore), Adani Enterprises (Rs 932.52 crore), Axis Bank (Rs 919.70 crore) and HDFC Bank (Rs 893.65 crore) were among the most active stocks on Dalal Street on Friday in value terms.
Friday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 36.83 crore), YES Bank (Shares traded: 10.68 crore), SAIL (Shares traded: 10.60 crore), PNB (Shares traded: 10.07 crore), Tata Motors (Shares traded: 8.09 crore), Tata Power (Shares traded: 7.90 crore), Kalyan Jewellers India (Shares traded: 5.14 crore), Tata Steel (Shares traded: 4.29 crore), JP Power (Shares traded: 4.26 crore) and Reliance Power (Shares traded: 4.19 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Godrej Industries, JSW Steel, CDSL, NRB Industrial Bearings, Orchid Pharma, Pritish Nandy Communications, Privi Speciality Chemicals, Prism Johnson, AGC Networks and Praj Industries witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Friday, signalling bullish sentiment.
Stocks seeing selling pressure
Valiant Organics, Asian Hotels (West), AKG Exim, Future Retail, Future Supply Chain, Future Lifestyle Fashions, Jiya Eco-Products, Jump Networks, MT Educare and Sanwaria Consumer witnessed strong selling pressure in Friday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 366 stocks on the BSE 500 index settled the day in green, while 128 settled the day in red.
Podcast: Why do US bond yields give Dalal Street a headache? >>>
As seen in the last few weeks, yields on 10-year US bonds have become one of the most important metrics for Dalal Street investors to track. A sharp spike in yields left Sensex tumbling and any cooling off eases the pressure off the bulls. After reaching a one-year high of 1.754 per cent on March 18, the benchmark 10-year note yields in US are now yielding 1.674 per cent. In today’s special podcast with independent market expert Rajiv Nagpal, we try and understand the negative co-relation between bond yields and stocks.