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

Indian equity indices ended on a subdued note in Friday’s session as global recession worries weighed on investor sentiments. Nifty ended below 18,050, while Sensex fell 237 points to settle at 60,621 levels. Selling was seen across sectors except for banks and financial services.

Here’s how analysts read the market pulse:

“Nifty remained sideways during the week as the benchmark index failed to provide any directional movement. On the higher end, it failed to reclaim the 50-day exponential moving average, considered a line of polarity between bullish and bearish market sentiment for the short term. The sentiment remains indecisive as the Nifty forms a back-to-back Doji pattern on the weekly chart.

However, the long-term bullish setup remains intact, with the higher top, higher bottom formation remaining in force. On the lower end, support is intact at 17750, and resistance on the higher end is pegged at 18300. Breakout on either end to confirm the directional trend,” Rupak De, Senior Technical Analyst at

, said.

“Shaking off the weak lead from Wall Street, domestic indices attempted to trade higher due to economic optimism that stemmed from China’s reopening. However, concerns over the global economic slowdown eventually caught up and dragged markets lower. All sectors bled, barring banking stocks, ahead of the release of key earnings by private banking majors,” Vinod Nair, Head of Research at

, said.

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

Wall Street rallies to end higher
US stocks rallied to close higher on Friday, as the S&P 500 and Dow snapped a three-session losing streak and the Nasdaq rose more than 2%, as quarterly earnings helped lift Netflix, while Google parent Alphabet climbed after announcing job cuts. Shares of Netflix jumped as the streaming company added more subscribers than expected in the fourth quarter and said co-founder Reed Hastings was stepping down as chief executive. Alphabet Inc was the most recent company to announce job cuts as it said it was cutting 12,000 jobs, sending shares higher.

European stocks end lacklustre week higher

European shares closed higher on Friday but marked weekly losses as investors took a cautious view of the earnings season and the upcoming central bank decisions, although China’s reopening from COVID-19 lockdowns offered some relief. The pan-European STOXX 600 rose 0.4%, lifted by travel & leisure and retail stocks.

Tech View: Bearish candle
A reasonable negative candle was formed on the daily chart, which indicates a consolidation movement in the market. The Nifty is currently placed within a broad high low range of 18200 to 17900 levels, and the specific direction is missing in the market.

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

, , and JK Paper, 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 Federal Bank,

, , and , among others. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms
RIL (Rs 1690 crore), HDFC Bank (Rs 1565 crore), HUL (Rs 1172 crore), and Infosys (Rs 995 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 the highest trading turnovers in the day.

Most active stocks in volume terms
Yes Bank (Shares traded: 13.23 crore), Suzlon Energy (Shares traded: 11.28 crore), PNB (Shares traded: 6.08 crore), Vodafone Idea (Shares traded: 5.16 crore) and Zomato (Shares traded: 4.73 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of

, , , Usha Martin and Swan Energy, among others, witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of

, Indus Towers, SIS India, Balaji Amines, and hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured bears as 1,983 stocks ended in the red while 1,498 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)