Here’s how analysts read the market pulse:
Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan, said that the index had stepped into a short-term consolidation mode on Monday and witnessed a follow-through selling today.
“The hourly chart shows that the index is parting from an upper channel line on the downside, and on the way down, it has breached the key hourly moving averages. The hourly Bollinger Bands have started expansion, thus, making way for the index on the downside. Also, the Nifty50 has entered into a recent gap area on the daily chart and can move down further towards 15,360 to fill up the gap area,” Ratnaparkhi said.
Mazhar Mohammad of Chartviewindia.in said that the index has not only closed below the 200-day EMA, but has also partly bridged the bearish gap registered on July 20. If the index fails to sustain above 16,359, the weakness can extend further towards 16,100 levels, he said.
That said, here’s a look at what some key indicators are suggesting for Wednesday’s action:
US stocks fall after Walmart’s profit warning
US stock indexes fell on Tuesday after Walmart’s profit warning heightened fears in the retail sector that consumers were cutting back on discretionary spending in the face of decades-high inflation.
At 10:11 a.m. ET, the Dow Jones Industrial Average was down 69.70 points, or 0.22%, at 31,920.34, the S&P 500 was down 21.35 points, or 0.54%, at 3,945.49 and the Nasdaq Composite was down 117.20 points, or 0.99%, at 11,665.47
Walmart Inc’s shares slumped 8.7%, while Target and Amazon.com fell about 3.0% each, with the online retail giant weighing the most on the Nasdaq index.
Gas woes keep European stocks subdued
European shares moved sideways and bond markets rallied on Tuesday as some disappointing earnings, the prospect of another super-sized U.S. interest rate hike and a looming gas crisis all kept the mood cautious. Gas supply fears also dampened sentiment.
The pan-European Stoxx 600 index closed flat, with retail stocks sliding 4% while health care gained 1.7%. Frankfurt’s DAX slumped 0.9 percent while the CAC in Paris shed 0.4 percent
Tech View: A likely weakness ahead
Nifty50 on Tuesday fell for the second day in a row and, in the process, settled below the 16,500 level. The index formed a bearish candle on the daily chart, with no upper wick, suggesting selling at the word go. The 50-pack index closed near the day’s low. Analysts believe further weakness cannot be ruled out.
F&O: Support at 16,200
On the options front, maximum Call open interest (OI) is at 17,000, followed by the 16,600 strike. The maximum Put OI is at 16,000, followed by the 16,400 strike. Call writing is seen at 16,600 and 16,700 strikes, while Put writing is seen at 16,100 and 16,400 strikes. Option data suggests a wider trading range between 16,200 to 16,800 zones, said Chandan Taparia of Motilal Oswal Securities.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trade setup on the counters of
, PVR, , and , ASL Industries, Madhya Bharat Agro, Party Cruisers, Lexus Granito(India) and .
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.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of
, NHPC, IDFC, , , and , among others.
Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
Zomato (Rs 1,010 crore), Tata Steel (Rs 784 crore), Bajaj Finserv (Rs 783 crore),
(Rs 679 crore), Axis Bank (Rs 634 crore), Infosys (Rs 582 crore) and TCS (Rs 513 crore) were among the most active stocks on NSE 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
Zomato lead the stock in terms of volumes, followed by YES Bank, Vodafone Idea, Suzlon Energy, Bank of Baroda, SAIL, Delta Corp, ONGC and BHEL. These stocks were among the most traded stocks in the session on NSE.
Stocks showing buying interest
, Navin Fluorine and Timken India witnessed strong buying interest from market participants, as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure
Tanla Solutions, Zomato, Sterlite Tech, Policy Bazaar and
witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counters.
Sentiment meter favours bears
Overall, the market breadth favoured the bears, as 2,175 stocks ended in the red, while 1,156 names settled with cuts.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)