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Ahead of Market: 11 things that will decide stock action on Thursday

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NEW DELHI: Nifty opened gap up and made a rebound after its worst session in 6 weeks. The headline index formed a ‘Bullish Harami Pattern’ pattern on the daily chart which usually signals towards a possible trend reversal.

Mazhar Mohammad, Chief Strategist at Chartviewindia.in said, from a risk management perspective, one can look for relief rally by placing a stop loss below 14,300 level on a closing basis. If Nifty sustains above 14,280 level, it may initially expand to 14,600-652 zone.

“India’s retail inflation for March also rose to 5.52 per cent, however, it did not harm the market sentiment as it was in line with the recent RBI policy forecast. How the lockdowns will affect the economy will determine the trend of the domestic market in the short-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 Thursday’s action:

US stocks rise on upbeat earnings reports

At 09:50 a.m. ET, the Dow Jones Industrial Average rose 145.73 points, or 0.44 per cent , to 33,823.00, the S&P 500 gained 4.13 points, or 0.10 per cent, to 4,145.72 and the Nasdaq Composite gained 15.22 points, or 0.11 per cent, to 14,011.32. Seven out of the 11 main S&P 500 sectors were higher in early trading, with financials up 0.4 per cent, while the S&P 500 banks index edged 0.3 per cent lower.

Upbeat earnings nudge European stocks higher

European stocks inched up on Wednesday, the pan-European STOXX 600 index rose 0.1% by 0707 GMT, with technology and personal & household goods sectors among the top gainers. An upbeat earnings from German software firm SAP and French luxury goods maker LVMH offset concerns about a potential setback to the continent’s Covid-19 vaccination programme. SAP rose 2.6% after it nudged its outlook for 2021 revenue higher after reporting first-quarter results that showed gains in cloud sales.

Tech view: Nifty chart signals trend reversal

Nifty50 formed what looked like a Bullish Harami Pattern on the daily chart, which generally signals a trend reversal. But analysts advised investors not to get carried away and look to lighten up positions on rallies. Ruchit Jain of Angel Broking said, “the bearish gap area and the ‘20-day exponential moving average in the 14,650-14,700 zone remain a sturdy wall, which could be difficult to surpass immediately. On the flip side, the ‘89 DEMA’ will be a key support, as Nifty did not breach that and Monday’s low almost coincided with it. Traders should look to lighten up longs on pullback, as the index approaches its resistance zone.”

Check out the candlestick formations in the latest trading sessions

Candlestick patternsETMarkets.com

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of Tata Motors, , HDFC, Kotak Mahindra Bank, Bajaj Finserv, ICICI Securities, Balkrishna Industries, and Vaibhav Global.

Stocks signalling weakness ahead

The MACD showed bearish signs on the counters of Adani Ports & SEZ,

, Adani Enterprises, Ambuja Cements, Adani Transmission, MindTree, Religare Enterprises, Coforge, GSFC, Mphasis, ACC, Nippon Life AMC, Deepak Fertilisers, Prestige Estates Projects, JMC Projects, DCM Shriram, Godawari Power & Ispat, Kamdhenu Ltd, Cosmo Films, TV Today Network, Sheela Foam and Akzo Nobel India.

Tuesday’s most active stocks

Adani Ports SEZ (Rs 3822.99 crore), Tata Motors (Rs 3425.60 crore), TCS (Rs 2696.88 crore), Infosys (Rs 2072.17 crore), Dr. Reddys (Rs 1921.94 crore), Tata Steel (Rs 1773.32 crore), RIL (Rs 1730.18 crore), SBI (Rs 1674.38 crore), JSW Steel (Rs 1611.55 crore) and Bajaj Finance (Rs 1479.64 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.

Tuesday’s most active stocks in volume terms

PNB (Shares traded: 14.78 crore), Vodafone Idea (Shares traded: 12.14 crore), Tata Motors (Shares traded: 11.69 crore), IOB (Shares traded: 8.17 crore), YES Bank (Shares traded: 7.95 crore), Tata Power (Shares traded: 7.69 crore), Bank of Maharashtra (Shares traded: 7.03 crore), SAIL (Shares traded: 6.43 crore), IDFC First Bank (Shares traded: 6.30 crore) and BHEL (Shares traded: 5.60 crore) were among the most traded stocks in the session.

Stocks showing buying interest

Vinati Organics, Panacea Biotec, Nureca, Gujarat Alkalies, Amrutanjan Healthcare, KPR Mill, Subex, Aakash Exploration Services, Saksoft, KDDL and Tamilnadu PetroProducts witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.

Stocks seeing selling pressure

AKG Exim, Global Vectra Helicorp, Ortin Laboratories, Suvidhaa Infoserve, Ujaas Energy, Radha Madhav Corporation, LCC Infotech and Shrenik witnessed strong selling pressure in Tuesday’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 391 stocks on the BSE 500 index settled the day in green, while 106 settled the day in red.

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The government’s fast-tracking of emergency approval for foreign-produced Covid jabs and Skymet’s prediction of a normal monsoon this year lifted domestic stocks on Tuesday. Sensex climbed 660 points to close above 48,550 level while Nifty surged over 1 per cent to breach the 14,500-mark. Battered banking stocks outshone, with the Nifty Bank surging 3.2 per cent.