Before the Market: 10 Things That Will Impact Monday Stock Trading
The NSE Nifty 50 fell 1.09% to close at 24,531, while the S&P BSE Sensex fell 0.91% to close at 80,604.
Friday’s decline cut the benchmark’s weekly gain to 0.1%, extending its seven-week gain to its longest weekly gain since January 2018.
Here’s how analysts see market trends:
“On the daily chart, we can see that Nifty is facing resistance in the 24850-24900 range where Fibonacci levels are located. The negative divergence and crossover of momentum indicators indicate that the bearish trend may continue. Hence, a consolidation is likely in the short term ahead of a major economic event. In terms of levels, 24400-24350 are important support areas while 24730-24780 are likely to act as important resistance areas in the short term,” said Jatin Gedia of Sharekhan.
Rupak De, Senior Technical Analyst at LKP Securities, said, “On the daily chart, Nifty is forming a bearish engulfing pattern, indicating a possible bearish reversal in the market. RSI is showing negative divergence, indicating a change in price momentum. Also, the daily RSI has entered a bearish crossover, breaking out of the overbought zone. On the downside, support is at 24,500, below which the index could fall towards 24,400-24,200. On the upside, resistance is at 24,650-24,700.” That said, let’s see what some of the key indicators are suggesting for Monday’s action.
US Market:
U.S. stocks extended their losses on Friday as uncertainty grew in an already volatile market amid ongoing turmoil related to a global technical outage caused by a software glitch.
A global technology outage has caused disruption to several industries, including airlines, banking and healthcare, after a flaw in cybersecurity firm Crowdstrike’s software caused Microsoft’s Windows operating system to crash.
All three major U.S. stock indexes ended lower, with the Dow Jones Industrial Average taking the biggest hit.
European stocks:
European stocks posted a weekly decline, led by a sell-off in technology shares and some earnings losses, as well as a drop in commodities, capping a tumultuous week marked by the global tech crisis on Friday.
The STOXX 600 index across Europe fell 0.8%, its lowest in more than two weeks and its weekly decline of more than 2%, the biggest weekly decline of the year.
Technical View: Long Bear Candle
Nifty ended the trading day down 270 points on Friday, forming a long bearish candlestick on the daily chart and a shooting star candlestick on the weekly chart, indicating temporary weakness in the near future.
The short-term trend of Nifty appears to have reversed from its all-time high. The candlestick pattern formation on the daily and weekly charts suggests further weakness in the market ahead. The next lower support levels to watch are around 24,200 and 24,000 levels. Nagaraj Shetti of HDFC Securities said immediate resistance is at 24,850.
Stocks with a bullish bias:
According to the momentum indicator Moving Average Convergence Divergence (MACD), bullish trading was observed on exchanges including Emami, Orchid Pharma, Bharti Hexacom, and Global Offshore Services.
MACD is known to signal a trend reversal in a traded security or index. When MACD crosses the signal line, it sends a bullish signal, indicating that the security price may rise, and vice versa.
Stocks that are forecasting weakness going forward:
MACD has shown bearish signals on counters like OFSS, Abbott India, Blue Dart Express, Persistent Systems, Paytm, HUDCO, Sky Gold etc. Bearish crossover of MACD on these counters indicates that the downtrend has just begun.
Most Active Stocks in Value:
Infosys (Rs 5,399 crore), RVNL (Rs 4,460 crore), Tata Teleservices (Rs 3,530 crore), HAL (Rs 3,113 crore), IRFC (Rs 2,576 crore), HDFC Bank (Rs 2,093 crore) and RIL (Rs 2,055 crore) were among the most active stocks in terms of value on NSE. High activity of a counter in terms of value can help identify the counter with the highest turnover for the day.
Most active stocks by trading volume:
Some of the most traded stocks during the NSE session included Vodafone Idea (Trading Shares: Rs 3.7 billion), Tata Teleservices (Trading Shares: Rs 3.34 billion), YES Bank (Trading Shares: Rs 1.67 billion), IRFC (Trading Shares: Rs 1.24 billion), Tata Steel (Trading Shares: Rs 7.80 billion), RVNL (Trading Shares: Rs 7.30 billion) and NHPC (Trading Shares: Rs 6.50 billion).
Stocks showing interest in buying:
Stocks like Tata Teleservices, Jubilant Life, Infosys, Kalpataru Power, Mphasis, AIA Engineering and Emami hit 52-week highs, signaling strong buying interest from market participants and signaling bullish sentiment.
Stocks under selling pressure:
No major stock hit a 52-week low on Friday.
The sentiment meter is in favor of the bears:
Overall, market breadth favored the downtrend, with 858 stocks closing higher while 3,071 stocks closed lower.
(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own and do not necessarily represent the views of The Economic Times)
