Here’s how analysts read the market pulse:
Independent analyst Manish Shah said the larger trend is still upward, but the ‘rejection’ candle for the day suggests there could be a pause in the ongoing rally. “A minor swing high but a bearish candle with a bit of a topping tail suggest the bulls took a breather a day before the August F&O expiry,” he said.
Rahul Sharma of JM Financial Services said the relative strength index (RSI) has not improved much for Nifty50. “The confirmation of correction will come only if the index breaks below 16,400 decisively,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Thursday’s action:
Nasdaq scales new peak
Technology stocks nudged the Nasdaq to a record high on Wednesday, while a fall in healthcare shares and caution ahead of the Federal Reserve’s annual symposium kept broader markets subdued. Healthcare, consumer staples, and utilities – sectors usually considered safe bets by stock market investors – were among the top decliners. At 10:13 a.m. ET, the Dow Jones Industrial Average was up 17.61 points, or 0.05 per cent, at 35,383.87, the S&P 500 was up 4.88 points, or 0.11 per cent, at 4,491.11, and the Nasdaq Composite was up 12.96 points, or 0.09 per cent, at 15,032.76.
European shares closes flat
The broader European market clung near record highs in the early session ahead of a Federal Reserve speech on Friday. However, the STOXX Europe 600 index fell from record highs to close near the flatline by a marginal loss of 0.013 per cent from its previous close.
Tech View: Nifty faces resistance at 16,700
Nifty50 on Wednesday failed to capitalise on a gap-up start as it attracted profit booking after hitting an all-time high level and eventually erased nearly all intraday gains. Analysts said the index momentum may pause if the 16,700 level is not taken out soon. Rohit Singre of LKP Securities said the index needs to sustain above 16,700 level for any further upside.
F&O: Nifty turns weak ahead of F&O expiry
India VIX moved up 2.33 per cent from 13.18 to 13.49 levels. A cooldown in volatility from recent swing highs has again given a ‘buy on decline’ stance to the market and now VIX needs to hold below 12 level to get more buying interest in the broader market. On the options front, maximum Put Open Interest stood at 16,500 followed by 16,600 level, while maximum Call OI was seen at 16,700 followed by 16,800 strikes.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Spicejet, Ircon International, Adani Enterprises, Hindustan Petroleum, SBI Cards, TCNS Clothing, Great Eastern, Nippon Life AMC, Refex Industries, Indian Energy Exchange, Bajaj Electricals, Cholamandalam Invest, Torrent Power, Nectar Lifesciences, Vinyl Chemicals, Hind Rectifiers, Dr. Reddy’s Labs, Dhani Services, UTI AMC, HDFC AMC, EIH, Dalmia Bharat, Poly Medicure, ABB Power Products, Themis Medicare, Sundaram Finance, Dharani Sugars, DFM Foods, Mahindra EPC Irrigation, Superhouse, Crest Ventures, Honda India Power, Global Education and GRP.
The MACD is known for signalling 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 signalling weakness ahead
The MACD showed bearish signs on the counters of Star Cement, Elecon Engineering, Chambal Fertiliser,
, Maharashtra Seamless, Krebs Biochemicals, Cera Sanitaryware and . A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
Tata Steel (Rs 1765.94 crore), Bajaj Finserv (Rs 1583.67 crore), Adani Ports SEZ (Rs 1521.73 crore), RIL (Rs 1361.13 crore),
(Rs 1065.82 crore), Bajaj Finance (Rs 1053.67 crore), Tata Motors (Rs 903.32 crore), Adani Enterprises (Rs 782.76 crore), TCS (Rs 778.63 crore) and Hindalco (Rs 774.01 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with the highest trading turnovers in the day.
Most active stocks in volume terms
Vodafone Idea (Shares traded: 13.25 crore), YES Bank (Shares traded: 9.95 crore), GTL Infra (Shares traded: 5.89 crore), Zomato (Shares traded: 5.11 crore), PNB (Shares traded: 4.55 crore), NALCO (Shares traded: 3.67 crore), SAIL (Shares traded: 3.32 crore), Tata Motors (Shares traded: 3.15 crore), Canara Bank (Shares traded: 3.15 crore) and IDFC First Bank (Shares traded: 3.02 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Avenue Supermarts, Coforge, Linde India, HAL, Adani Power, JSW Energy and HFCL witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.
Stocks seeing selling pressure
CarTrade Tech, AmaraRaja Batteries, IMP Powers and Radha Madhav Corporation witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, the market breadth remained in favour of the bulls. As many as 287 stocks on the BSE500 index settled the day in the green, while 205 settled the day in the red.
Podcast: Where is Nifty Bank headed?
BSE Sensex snapped the two-day winning streak, whereas its NSE counterpart Nifty50 managed to close marginally higher. Sensex gyrated in the range of 300 points, but settled below 55,950, shedding only 15 points. However, Nifty50 edged up only 10 points to settle at 16,635. Broader markets outperformed as BSE midcap and smallcap indices gained about half a per cent each. But, Nifty Bank continues to underperform. Where is it headed? How should investors position themselves amidst the current volatility?