Ahead of Market: 10 things that will decide stock action on Monday

Indian equities tracking positive global markets sentiment and gains in the realty and metal pack ended higher on Friday. Nifty at the close settled above 18,530 points, with gains of 0.25%. On a weekly basis, indices ended on a positive note with marginal gains.

Here’s how analysts read the market pulse:

“This week the Indian market was volatile, however it was able to regain the momentum led by positive domestic outlook accompanied by global cues. Auto stocks garnered attention as sales numbers for May came in strong, with a sequential recovery boosting sentiment across the sector. The hope that the Fed will refrain from a rate hike has provided comfort to the global equity market,” Vinod Nair, Head of Research at Geojit Financial Services, said.

“The overall sentiment in the market is expected to remain sideways, indicating a lack of clear direction in the near term. The Nifty is likely to find support at the levels of 18450-18500, while resistance levels are anticipated at 18650 and 18800,” Rupak De, Senior Technical Analyst, LKP Securities, said.

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

US Market
U.S. stocks closed higher on Friday after a labor market report showing moderating wage growth in May indicated the Federal Reserve may skip a rate hike in two weeks, while investors welcomed a Washington deal that avoided a catastrophic debt default.
The tech-heavy Nasdaq index surged to a 13-month intraday high and posted its sixth-straight week of gains that marked its best winning streak since January 2020.
European shares log best day in two months
European shares clocked their best one-day gain on Friday as investors took comfort from easing euro zone inflation, the passing of the U.S. debt bill, and growing evidence supporting the case for the Federal Reserve to pause interest rate hikes this month.

The pan-European STOXX 600 index closed 1.5% higher, with miners and real estate at the forefront of the buying spree.

Tech View: Small bodied bearish candle
On technical charts, the index has formed a small bodied Bearish candle and an inside bar on daily scale with longer lower shadow, indicating support based buying is intact, said Chandan Taparia of Motilal Oswal Securities.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Tata Steel, UCO Bank, SAIL, Jain Irrigation and Hindalco 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 Engineers India, Gujarat Gas, Mahanagar Gas and Capri Global 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
RIL (Rs 1793 crore), HDFC Bank (Rs 1436 crore), Infosys (Rs 1421 cr), Adani Enterprises (Rs 1363 cr) and Zomato (Rs 1219 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 highest trading turnovers in the day.

Most active stocks in volume terms
Suzlon Energy (Shares traded: 25.86 crore), Zomato (Shares traded: 17.07 crore), YES Bank (Shares traded: 11.37 crore), Reliance Power (Shares traded: 5.30 crore), and TV18 Broadcast (Rs 4.49 crore) among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Cyient, Star Cement, Minda Corporation, Mankind Pharma and HUDCO witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Future Enterprises (DVR), De Neers Tools, Sheetal Cool, SITI Networks and GSS Infotech among others hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured bears as 2,137 stocks ended in the green, while 1413 names settled with losses.

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