Here’s how analysts read the market pulse:
“The progression of the monsoon and the trend of Kharif sowing in July will be crucial factors in determining future inflation. However, controlled inflation in the US has instilled optimism among investors, who believe that a 25-bps rate hike would be sufficient to stabilize the US economy. This positive outlook has contributed to strong buying in Indian IT stocks, despite muted Q1 earnings. Consequently, the US Dollar and bond yields have fallen. The broader Indian market traded positively, reaching all-time high levels, on expectations of buoyant Q1 results, consistent FII inflows, decreasing wholesale prices, and low volatility (VIX). Among the sectors, Nifty Bank performed weaker as it started the earnings season on a low note. However, investors are eagerly awaiting more earnings reports in the coming week to determine their trading direction,” Vinod Nair, Head of Research at Geojit Financial Services, said,
“ Having moved above the crucial resistance of 19500 (1.236% Fibonacci projection of weekly taken from recent bottom-top bottom). As per this pattern, the next upside target to be watched is around 1.382% Fibonacci projection at 19800 levels, which is expected to be the next upside target for the Nifty for the coming week. Immediate support is at 19470 levels,” Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said.
That said, here’s a look at what some key indicators are suggesting for Monday’s action:
US stocks finish on muted note
Wall Street stocks finished a winning week on a subdued note Friday, with both the S&P 500 and Nasdaq edging lower despite solid earnings from large banks.
After ending higher for four straight days in the wake of cooling US inflation numbers, Friday’s mixed session “should be expected,” said Adam Sarhan of 50 Park Investments.
The broad-based S&P 500 finished at 4,505.42, down 0.1 percent for the day but up 2.4 percent for the week.
European shares close best week in over three months
European shares edged slightly lower on Friday, but that did little to change their biggest weekly percentage jump in more than three months on hopes that easing inflation would allow the U.S. Federal Reserve to pause rate hikes soon.
After five sessions of gains, the pan-European STOXX 600 index closed 0.1% lower, as oil and gas stocks dropped 2.1% on falling crude prices.
The index has gained nearly 3% this week, marking its best week since the end of March, recouping almost all of last week’s losses.
Tech View: Long bull candle
A long bull candle was formed on the daily chart with a minor lower shadow. The chart pattern indicates an attempt of a decisive upside breakout of the narrow range movement at 19300-19500 levels for the last few sessions.
Nifty on the weekly chart formed a long bull candle that negated the bearish candle of last week and closed higher. Hence, a confirmation of an upside breakout with a follow-through up move on Monday is likely to open more upside for the market ahead
Stocks showing bullish bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Subex, Ashok Leyland, Birlasoft, Snowman Logistics and MMTC 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 Bank of Baroda, NHPC, Rashtriya Chemicals and HPCL 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
TCS (Rs 2171 crore), HDFC Bank (Rs 2031 crore), RIL( Rs 1912 crore), Infosys (Rs 1805 crore) and Kotak Bank (Rs 1335 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
Zomato (Shares traded: 9.16 crore), Reliance Power (Shares traded: 8.34 crore), YES Bank (Shares traded: 8.47 crore), Suzlon Energy (Shares traded: 8.15 crore) and Power Grid (Shares traded: 5.4 crore) among the most traded stocks in the session on NSE.
Stocks showing buying interest
Shares of JBM Auto, Craftsman Automation, Just Dial, RBL Bank and Century Textiles 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 MOS Utility, Insecticides (India) and Dangee Dums among others stocks hit their 52-week lows, signaling bearish sentiment on the counters.
Sentiment meter favours bulls
Overall, market breadth favored bears as 2,123 stocks ended in the green, while 1,298 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)
