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    Ahead of Market: 12 things that will decide stock action on Wednesday


    A look at what some of the key indicators are suggesting for Wednesday’s market action.

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    Nagaraj Shetti of HDFC Securities says Nifty's short-term trend remains positive.
    NEW DELHI: Nifty extended its winning run into the fifth consecutive session and seems to be inching towards the psychologically important 10,000 mark. Analysts said the rally is expected to continue with the index getting support near the 9,900-9,800 zone.

    Nagaraj Shetti of HDFC Securities says Nifty's short-term trend remains positive. "A sustainable move above the 10,000 mark is expected to pull it towards the next upside region around the 10,500 mark in next 1-2 weeks. Its inability to move above 10,000 is likely to trigger downward correction from the highs," he said.

    Deepak Jasani of HDFC Securities said Nifty on Tuesday closed at its highest level since March 11. "Trading volumes were higher than normal. Financials and media stocks did well while PSU stocks fell. Technically, Nifty has made a higher top after making a higher bottom on May 18. It could now see a brief consolidation/correction and rise towards the 10,295-10,334 zone," he said.

    Vinod Nair of Geojit Financial Services said the uptrend continued in most major sectoral indices, while the broader market also participated in the rally. "In spite many possible negative triggers, positive sentiment still drives the market," he said.

    That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s market action:

    US shares scale three-month peak
    The S&P 500 and the Dow Jones indexes hit new three-month highs on Tuesday on prevailing optimism around the reopening of businesses, with investors remaining cautious around more disruptions from protests in the country over the death of a black man while in police custody. At 7:25 pm (IST), the Dow Jones Industrial Average was up 117.26 points, or 0.46 per cent, at 25,592.28, the S&P 500 was up 5.38 points, or 0.18 per cent, at 3,061.11. The Nasdaq Composite was down 16.48 points, or 0.17 per cent, at 9,535.57.

    European shares near three-month high
    European shares inched closer to a three-month high on Tuesday on optimism around a post-coronavirus economic recovery, with German stocks buoyed by a jump for Lufthansa. The pan-European STOXX 600 rose 1 per cent in early deals to hit its highest level since March 9.

    Higher highs & lows signal bullish trend
    Nifty formed a bullish candle on the daily chart on Tuesday. The 50-pack has been forming higher highs and lows for some time, suggesting that supports have shifted higher. The index needs to take out the 10,000 level soon, else profit booking may set in, analysts said.

    Check out the candlestick formations in the latest trading sessions

    Nifty rally gaining momentum
    Nifty seems to be breaking out from a ‘Cup and Handle’ pattern on the daily scale, which can add more momentum to the market. Momentum oscillator RSI moved above its previous resistance at 60 level, indicating strength in the index. Nifty faces resistance in the 10,200-10,300 zone, while support is inching higher to 9,820 and 9,700 levels.

    Stocks showing bullish bias
    Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of Bandhan Bank, Glenmark Pharma, LIC Housing, Power Finance, Adani Transmission, ITI, MindTree, CG Power, PTC India, Tata Elxsi, UCO Bank, Rallis India, DHFL, Central Bank, Gujarat Narmada Valley, JK Paper, Bajaj Electricals, Gujarat Gas, Alembic, Graphite India, Khadim India, Century Plyboards, IIFL Securities, Indiabulls Ventures, Cochin Shipyard, FACT, Essel Propack, Aditya Birla Money, Pennar Industries, Star Paper Mills, Hikal, HSIL and Titagarh Wagons, among others.

    Stocks signalling weakness ahead
    The MACD showed bearish signs on the counters of Dr. Reddy's Labs, Responsive Industries, Manaksia Coated and Banaras Beads. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

    Most active stocks in value terms
    Bajaj Finance (Rs 5311.39 crore) , Kotak Bank (Rs 2293.25 crore) , HDFC Bank (Rs 2066.48 crore) , Bharti Airtel (Rs 1803.95 crore) , ICICI Bank (Rs 1629.62 crore) , RIL (Rs 1564.76 crore) , Axis Bank (Rs 1509.29 crore) , HDFC (Rs 1481.77 crore) , Bajaj Finserv (Rs 1349.68 crore) and IndusInd Bank (Rs 1214.68 crore) were among the most active stocks on Dalal Street on Tuesday 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
    Voda Idea (Shares traded: 93.93 crore) , Tata Motors (Shares traded: 12.53 crore) , Motherson Sumi (Shares traded: 8.34 crore) , Tata Power (Shares traded: 7.55 crore) , State Bank of India (Shares traded: 7.04 crore) , Ashok Leyland (Shares traded: 5.86 crore) , NCC (Shares traded: 4.96 crore) , ICICI Bank (Shares traded: 4.75 crore) , Federal Bank (Shares traded: 4.75 crore) and Trident Ltd (Shares traded: 4.65 crore) were among the most traded stocks in the session.

    Stocks seeing buying interest
    Adani Green Energy, Alok Industries, Dixon Technologies (India), J B Chemicals and Aurobindo Pharma witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.

    Stocks witnessing selling pressure
    Khandwala Securities, Krishana Phoschem, Rajratan Global Wire and Raj Rayon Industries 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 374 stocks on the BSE 500 index settled the day in green, while 123 settled the day in red.

    Podcast:Will this Nifty rally trap investors?
    In continuing the rally, the market on Tuesday shrugged off Moody's credit rating downgrade, other weak macro-economic signals and poor earnings numbers. But the question is, how long can it sustain this momentum? Will investors buying stocks in this rally get trapped?

    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice on ETMarkets. Also, is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds.)

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    Rahul 43 days ago
    To fall one must climb a cliff
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