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

NEW DELHI: Nifty50 on Wednesday slipped from its record level and formed a bearish candle on the daily chart. Analysts said any fall in the market can be used to buy the dips.

Here's how analysts read the market pulse:

Gaurav Ratnaparkhi of Sharekhan said the index has stepped into a short-term consolidation. "Initial support on the downside stands at 17,000 level, whereas it can test the 16,800 level over the next few sessions," he said.

Mazhar Mohammad of Chartviewindia.in said he expects weakness to continue if the index slips below the 17,055 level. "Going forward, the trend shall remain sideways with a negative bias. In case of weakness, the initial target can be at 16,900 level," he said.

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

Tech stocks power Nasdaq to record high
The Nasdaq Composite hit a record high on Wednesday, with high-growth technology stocks in the lead after weaker-than-expected private payrolls data raised hopes for extended support from the US central bank. At 10:26 a.m. ET, the Dow Jones Industrial Average was down 45.90 points, or 0.13 per cent, at 35,314.83, the S&P 500 was up 5.74 points, or 0.13 per cent, at 4,528.42, and the Nasdaq Composite was up 84.99 points, or 0.56 per cent, at 15,344.22.

European shares end higher
European stocks closed higher on Wednesday as fresh signs of weakness in Asian economies were offset by hopes for more stimulus, while investors shook off concerns about rising inflation. After seven straight months of gains, the pan-European STOXX 600 rose 0.5 per cent to end at 473.12 points and was within striking distance of its record high of 476.16.

Tech View: Nifty shows bearish signs
Nifty50 on Wednesday faced heavy selling pressure after topping the 17,200 level for the first time in today's intraday trade. With this, the index has snapped a seven-day winning run, forming a bearish candle on the daily scale. Analysts said the index is likely to see short-term consolidation. They advised traders to buy on dips.

F&O: VIX eases over 2 per cent
India VIX fell 2.31 per cent from 14.52 to 14.18 level. A fall in volatility from a higher zone suggests the market decline can be bought into. Options data suggested a broader trading range between 16,500 and 17,500 levels, while the immediate trading range stood between 16,850 and 17,250 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of YES Bank, Bharti Airtel, Bank of Baroda, SBI, Orient Paper, India Cements, Bombay Dyeing, Oberoi Realty, Brigade Enterprises, Havells India, Indian Hotels, NCC, Wipro, Power Finance, Apollo Tyres, Biocon, Equitas Small Finance Bank, Indian Bank, RPG Life Sciences, Raymond, MTNL, Maruti Suzuki India, Lupin, Glenmark Pharma, Dhanlaxmi Bank, Cyient, Dr. Lal Pathlabs, Rallis India, Nelco, Texmaco Infrastructure, Abbott India, Bosch, Page Industries, Agro Tech Foods, TTK Healthcare, Mukta Arts, TVS Srichakra, 3P Land Holdings, Dhunseri Investments, Kewal Kiran Clothing, Revathi Equipment, Centum Electronics and Foseco India.

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 Arvind Fashions, VIP Industries, Pokarna and Brooks Laboratories. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Bharti Airtel (Rs 2007.62 crore), Indian Energy Exchange (Rs 1835.95 crore), Bajaj Finance (Rs 1682.20 crore), Axis Bank (Rs 1611.86 crore), Infosys (Rs 1314.05 crore), Kotak Bank (Rs 1271.41 crore), Tata Steel (Rs 1253.23 crore), RIL (Rs 1169.80 crore), Au Small Finance Bank (Rs 1109.95 crore) and ICICI Bank (Rs 996.46 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: 27.85 crore), YES Bank (Shares traded: 15.13 crore), NHPC (Shares traded: 10.59 crore), BHEL (Shares traded: 7.78 crore), PNB (Shares traded: 4.15 crore), NALCO (Shares traded: 3.64 crore), Indian Energy Exchange (Shares traded: 3.37 crore), Tata Motors (Shares traded: 3.31 crore), Tata Power (Shares traded: 3.12 crore) and IDFC First Bank (Shares traded: 3.10 crore) were among the most traded stocks in the session.

Stocks showing buying interest
ABB Power, Indian Energy Exchange, Oberoi Realty, Sobha and PNC Infratech witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Future Supply Chain witnessed strong selling pressure and hit a 52-week low, signalling bearish sentiment on the counter.

Sentiment meter favours bulls
Overall, the market breadth remained in favour of the bulls. As many as 249 stocks on the BSE500 index settled the day in the green, while 242 settled the day in the red.

Podcast: Which sectors to avoid now?

BSE Sensex gyrated in the range of 650 points and settled at 57,338, 214 points lower. Nifty50 could not hold 17,100 and closed at 17,076, 56 points lower. It scaled 17,200-level during the day. Fear gauge India VIX eased over 2 per cent to cross 14.5 level. While the market is still at its peak, which are the sectors that look overvalued? And which sectors must be avoided at this point in time?