According stock market research The Nifty ended only 80 points up in the week gone by while the Sensex shot up nearly 180 points to end higher for the second consecutive week at 15,752.05 points. Market experts citing the recent fall in the global indices say that the recent consolidation phase indicates caution.
Here’s how analysts read trends in the market:
As the market continues to trade in a range, Technical stock Research Analyst at HDFC Securities said Friday’s sharp upside recovery from the lows hints at the possibility of more upside for the market ahead. A sustainable upmove above 15,900-15,950 levels could bring bulls back into the market and that could possibly pull the Nifty towards the next upside levels of 16,200-16,300 levels quickly. Immediate support is placed at 15,630,” he said.
The index is likely to consolidate in the range of 15,500-15,900 in coming sessions.
The index started the week on a strong note and witnessed consolidation throughout the week. The near term support zone was placed around 15,700-15,650, which the index breached on July 1. However, it received support near 15,500. Overall structure shows that the index is likely to witness consolidation in the range of 15,500-15,900 in coming sessions.
Shares of US companies rise sharply
Wall Street bounced back to a sharply higher close on Friday after the worst first half in decades. The Dow Jones Industrial Average rose more than 1,000 points during the trading day, ending the day with a gain of about 350 points.
The rally was fueled by a number of factors, including a return to stability in China and the possibility that President Donald Trump will soon reach an agreement with Congress on his promised tax reforms.
The S&P 500 also reversed its earlier losses to finish up nearly 1%. The Nasdaq Composite Index was up 1.5% at midday Friday and reached its highest level since October 2017.
Industrial Average rose 321.83 points, or 1.05%, to 31,097.26, the S&P 500 gained 39.95 points, or 1.06%, to 3,825.33 and the Nasdaq Composite added 99.11 points, or 0.90%, to 11,127.85.
Europe’s equity market ends flat
European shares closed flat on Friday, as gains in defensives countered a sell-off in semiconductor and commodity-linked stocks, while investors prepared for the European Central Bank’s (ECB) first interest rate hike in more than a decade this month.
The pan-European STOXX 600 index (.STOXX) lost 0.02%. It was also weighed down by a rise in the euro against the pound sterling and a fall in oil prices.
In London, the FTSE 100 index (.FTSE) rose 0.05% to 7,974 points.
Zinc fell 1% in London following a 2.6% gain the previous session.
Weekly chart of the Harami candle
The Nifty50 is in a consolidation range, wherein it has strong support in the 15,500-15,600 range and hurdle in the 15,900-950 range. A decisive breach on either side can set the market trend going ahead, they said.
A bullish engulfing candle was formed on Friday for a second time this week. Bulls are pinning their hopes on a move towards 16,000 as a level to watch out for. The Nifty50 index touched an intraday high of 15,665 before closing at 15,630.
On the weekly scale, a bearish black candle formed with a long lower wick. During this week’s trading session, bulls were unable to take control over the index while bears were able to keep the pressure on bulls by taking over the upper end of their zone of interest.
Trading: Bull Ladder Strategy is an option for traders
The Bull Call Ladder strategy is the best way to trade Nifty. It is the most profitable option and will give you a maximum profit of Rs 500 per lot, which is equivalent to Rs 4.5K per trade. The stop loss should be placed at 16,200 and your target should be between 16,000 and 16,200. If you want to take full advantage of this strategy, you must ensure that there are no major movements in the market before placing your order on a particular level of Nifty’s share price.
Positive bias among stocks
The Momentum Indicator is a technical indicator that helps traders determine whether a security or index is trending or not. 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.
The MACD is based on differences between two moving averages: 10-day and 26-day exponential moving averages. These two averages are plotted on a chart and then compared against each other to determine whether an asset is trending or not. If the difference between these two moving averages gets larger over time, then it indicates that the security’s price is becoming more volatile (i.e., changing quickly). The larger this difference becomes, the more volatile the price of that particular security will be over time.
Weakness ahead for stocks
The MACD (Moving Average Convergence/Divergence) is a technical indicator that helps determine whether the price of a security is trending or not. It shows whether the price is moving in the same direction as other prices in the market. When it shows bearish signs on Indus Towers, NSE -0.69%, Hindustan Oil Exploration Company NSE 1.35%, Bajaj Auto NSE 0.49% and Nava Bharat Ventures, bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
The above mentioned counters were at an all-time high on February 17th, but then started falling from there and touched a low of Rs 394 by March 8th. The movement was very strong and sudden indicating that this could be a good buy for investors who are looking for high returns with low risk level.
Value-oriented stocks with the most activity
The NSE saw the highest trading activity in value terms on Tuesday, with Reliance Industries Ltd. (REL), ONGC Ltd., ITC Ltd., Titan Ltd., HDFC Bank Ltd., and ICICI Bank Ltd. among the most active stocks on the exchange.
Reliance Industries was the most active stock in terms of turnover, with a value-to-volume ratio of 0.78% compared to its overall average value-to-volume ratio of 1.33%. ONGC was second in terms of turnover at 0.75%, compared to its overall average value-to-volume ratio of 1.20%. Titan came in third with a value-to-volume ratio of 0.70%, compared to its overall average value-to-volume ratio of 1.07%. HDFC Bank was fourth in terms of turnover at 0.68%, compared to its overall average value-to-volume ratio of 1.13%. ICICI Bank came in fifth with a value-to-volume ratio of 0.67%, compared to its overall average value-to-volume ratio of 1.14%.
Stocks with the highest volume of activity
ONGC, Zomato, Vodafone Idea, IDFC First Bank and Reliance Industries were among the most traded stocks in the session on NSE.
ONGC gained 2.37% to Rs 140.90 on NSE . The stock was trading at an intra-day high of Rs 146.05 and an intraday low of Rs 139.40 – a daily move of Rs 5.10.
Zomato fell 0.27% to close at Rs 891 on NSE, after opening at Rs 894. The stock opened at an intra-day high of Rs 897 and a low of Rs 886, which is a daily move of 0.01%.
Vodafone Idea fell 0.67% to close at Rs 927 on NSE, after opening at Rs 925 – a daily move of 0%. The stock opened at an intra-day high of Rs 931 and a low of Rs 921 – a daily move of 0%.
IDFC First Bank fell 1.16% to end at Rs 239 on NSE , after opening at Rs 242 – a daily move of 1%. The stock opened at an intra-day high of Rs 243 and ended with a low of
Investors are showing interest in buying stocks
The shares of ITC experienced strong buying interest from market participants as they scaled their fresh 52-week highs. This indicates bullish sentiment, and it’s likely to continue.
Selling pressure on stocks
The market is trading with a low of 9,824.75 points, which is 5.78% lower than the previous close of 10,115.12 points. The total market capitalization is currently at Rs 1,92,03,200 crore and has fallen by 7.84% from last week’s levels.
On the NSE, the market breadth remained negative as compared to positive on BSE with both the Sensitive Indexes losing 2-3%; while on NSE only one index was positive—10-12 month treasury bill (T-Bill) along with Nifty 50 Index by 0.1%. In case of Reliance Industries Ltd (RIL), there has been a decline of 3%, Infosys Ltd (INFY), down by 1%, Tata Steel Ltd (TATA) down by 2% and ONGC down by 4%.
In the Sensex segment, HDFC Bank Ltd (HDBK), down by 2% and Tata Motors Ltd (TTM), down by 1%; have been among top losers in the Sensex; which was supported by metals index—Nifty Metals Index which gained 0.2%. On BSE Sensex , HDFC Bank was down 3%; Tata Motors 3%; Sun Pharma
Bulls are favored by the sentiment meter
The market breadth favoured winners as 1,652 stocks ended in the green, while 1,630 names settled with cuts.
The benchmark S&P BSE Sensex fell by 0.63 per cent on Monday to hit a low of 28,392.86 points.
In terms of individual stocks, PNB Housing Finance Ltd fell 3.04 per cent after the company reported a loss of Rs 34 crore in the quarter ended March 31, 2019.
The index had been trading at 29,902 points at 09:35 am on Monday and touched its intra-day low of 28,262.80 points at 10:00 am.
