Ahead of Market: 10 things that will decide D-St action on Monday

Indian shares experienced fluctuations between gains and losses on Friday, ultimately closing slightly higher. However, they recorded their first weekly decline in three weeks as investors adjusted positions ahead of the outcome of the national elections this Tuesday.

The NSE Nifty 50 concluded with a 0.2% increase at 22,531 points, while the S&P BSE Sensex saw a 0.1% gain, closing at 73,961. Initially, both benchmarks surged as much as 0.7% in early trade before retracing gains. Over the week, they posted a 1.9% decline.

In other developments, following the conclusion of the 7th phase of elections on Saturday, nearly all exit poll surveys suggested a likely victory for the BJP in this Lok Sabha election.

The collective average of major exit polls points to the BJP-led NDA securing 374 seats in this election. This positive sentiment is expected to lead to a significant market rally on Monday.

Here's how analysts read the market pulse:

"On the daily charts, we can observe that Nifty consolidated within the range of the previous trading session and has formed an inside bar pattern which makes the extremes of the range 22,700 – 22,400 crucial levels to watch out for. A breakout on either side shall lead to a treading move in that direction. In terms of levels, 22,420- 22,313 is the crucial support zone while 22,820 – 22,900 is the crucial resistance zone from a short-term perspective," said Jatin Gedia of Sharekhan.

Rupak De of LKP Securities, said, "The highest call writing is visible at 23,000, while there is significant put writing at 22,500, indicating that the Nifty might oscillate between 22,500 and 23,000 in the next few days. However, a fall below 22,500 might trigger a correction towards 22,000."

That said, here’s a look at what some key indicators are suggesting for Monday's action:

US market

The S&P 500 and Nasdaq posted losses for the week on Friday, breaking their five-week winning streaks, as investors digested an inflation report and assessed when the Federal Reserve might begin cutting interest rates.

The Dow rallied on Friday. The S&P 500 gained 44.53 points, or 0.85%, to end at 5,280.01 points, while the Nasdaq Composite lost 2.06 points, or 0.01%, to 16,735.02. The Dow Jones Industrial Average rose 595.78 points, or 1.56%, to 38,707.26.

European shares

European shares rose on Friday after softer U.S. inflation data spurred hopes of interest rate cuts by the Federal Reserve, while June rate cut bets for the eurozone remained intact despite hotter-than-expected inflation figures from the region.

The pan-European STOXX 600 index closed 0.3% higher but still recorded a second week of declines as euro zone bond yields spiked to mirror their U.S. counterparts on worries over interest rates remaining elevated.

Tech View: Long-legged Doji candle

Nifty formed a long-legged Doji candle on the daily charts to breach a 5-day losing streak as it ended 42 points higher at 22,531.

The 50-DMA is placed at around the 22,400 level, and a slip below this level could shift the test to the 22,300-22,260 zone. However, crossing 22,660 could resume the bullish trend, Om Mehra of SAMCO Securities said.

On the daily chart, the Nifty has now bounced back from close to the 50-day SMA after four sessions of losses. 14-day RSI at 50.33 is falling and remains below its 9-day EMA, which indicates that the momentum is weakening, chartists said.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of NHPC, Ratnamani Metal, Honasa Consumer, GE Shipping, J&K Bank, and Medplus Health Services among others.

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 signaling weakness ahead

The MACD showed bearish signs on the counters of Hindustan Zinc, Solar Industries, Sobha, Signature Global (India), M&M, and Indian Oil Corporation among others. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms

HDFC Bank (Rs 5,662 crore), Infosys (Rs 5,249 crore), RIL (Rs 4,442 crore), TCS (Rs 4,036 crore), Bharti Airtel (Rs 3,387 crore), ICICI Bank (Rs 2,937 crore), and L&T (Rs 2,375 crore) among others 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

Tata Steel (Shares traded: 8.3 crore), Infosys (Shares traded: 3.7 crore), HDFC Bank (Shares traded: 3.7 crore), Power Grid (Shares traded: 3.7 crore), NTPC (Shares traded: 3 crore), ITC (Shares traded: 2.8 crore), and ICICI Bank (Shares traded: 2.6 crore) among others were among the most traded stocks in the session on NSE.

Stocks showing buying interest

Shares of Jindal Stainless, Adani Power, Godawari Power, Jupiter Wagons, Blue Star, and KNR Constructions among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Shares of Atul, Berger Paints, KRBL, Route Mobile, Tata Elxsi, Ramco Cements, and Anupam Rasayan hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears

Overall, market breadth favoured bears as 2,099 stocks ended in the red, while 1,732 names settled in the green.(

Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)