NEW DELHI: Bull took a breather on Friday and the benchmark indices settled marginally lower on Friday as the rising cases of Omicron variant spooked the traders. Rising inflationary concerns also made some investors cautious. However, high hopes of a stellar earnings season are likely to sustain for the coming week.

Here’s how analysts read the market pulse:-

The Nifty50 witnessed buying interest at a low as it entered into the bullish gap zone of 18,128-18081 levels, giving legitimacy to the zone as critical short-term support, said Mazhar Mohammad at Chartviewindia.in.

Amol Athawale of Kotak Securities said that the texture of the market is bullish, but due to an overstretched rally, the market could consolidate in 18,050-18,375. For the bulls, 18,375-18,400 would be the immediate hurdle and above the same, the same breakout formation will continue up to 18,500.

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

Wall St dragged down by disappointing bank results

The Dow closed lower on Friday with a big drag from financial stocks as investors were disappointed by fourth-quarter results from big U.S. banks, which cast a shadow over the earnings season kick-off.

The Nasdaq and the S&P regained lost ground in afternoon trading to close higher. Meanwhile, the consumer discretionary stocks put pressure on the indexes throughout the session after morning data showed a December decline in retail sales and a souring of consumer sentiment. The Dow Jones Industrial Average fell 201.81 points, or 0.56%, to 35,911.81, the S&P 500 gained 3.82 points, or 0.08%, to 4,662.85 and the Nasdaq Composite added 86.94 points, or 0.59%, to 14,893.75. For the week, the S&P 500 fell 0.3% while the Dow fell 0.9% and the Nasdaq fell 0.3%.

At the end of the session, four out of eleven S&P sectors gained ground with energy leading gains.

European Markets close under pressure

European stocks pulled back on Friday, following global momentum as a fresh round of hawkish comments from Federal Reserve officials resurfaced expectations for imminent policy tightening. The pan-European STOXX 600 index closed down 1.01% and had its worst week since Nov. 26, weighed in part by declines in technology stocks. European bond yields also rose in choppy trade as investors focused on monetary policy tightening by central banks, though sharp falls in Germany’s benchmark 10-year yield earlier this week led it to notch its biggest weekly fall in 10 weeks.

Tech View: Rally to continue after a hiatus?

The Nifty50 made a good recovery from low on Friday and erased almost all gains, as it ended up forming a bullish candle on the daily chart. With that, the index also ended up with a decent bullish candle on the weekly chart, suggesting the bulls are in no mood to give up.

F&O: Short term trend +ve

The option writers are focused on writing higher strike price put options and now, 18,000 put options have attracted maximum open interest. This indicates that the support base for the short term is around the 18,000 mark and any dip towards this support should be used as a buying opportunity, said Ruchit Jain, Lead – Research, 5paisa.com.

“On the higher side, 18,400-18,500 would be the immediate range to look out for. In the banking index, 38,000 and 37,700 are the immediate supports. Considering the impulsive up move from the recent lows, this seems to be a short term correction within an uptrend and we should soon see the index resuming its uptrend,” he added.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Infosys, Triveni Turbine, Aegis Logistics, BSE, Raymond, Tanla Platforms, Vidhi Speciality Chemicals, Jindal Poly Films, Blue Star and Lumax Industries.

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 signaling weakness ahead

The MACD showed bearish signs on the counters of Motherson Sumi Systems, Bombay Dyeing, Firstsource Solutions, Birlasoft, MSP Steel & Power, Asian Paints and Muthoot Finance. A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks in value terms

Reliance Industries (Rs 2,341 crore), Infosys (Rs 1,471 crore), TCS (Rs 1,314 crore), IRCTC (Rs 1,262 crore), Axis Bank (Rs 1,178 crore), MindTree (Rs 1,143 crore) and Tata Power (Rs 909 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: 15.88 crore), Suzlon Energy (Shares traded: 13,80 crore), YES Bank (Shares traded: 7.66 crore), HFCL (Shares traded: 7.36 crore), Alok Industries (Shares traded: 4.07 crore), RBL Bank (Shares traded: 3.99 crore) and BHEL (Shares traded: 3.88 crore) were among the most traded stocks in the session.

Stocks showing buying interest

Aditya Birla Fashion and Retail, Adani Enterprises, Adani Green Energy, Balrampur Chini Mills, Bajaj Healthcare, Coastal Corporation, DB Realty, Filatex India, Globus Spirits, IDFC, Infosys, L&T, RateGain Travel Technologies, Tanla Platforms and Welspun Corporation witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure

Dilip Buildcon, One97 Communications (Paytm) and Gillette India witnessed strong selling pressure and hit its 52-week lows, signalling bearish sentiment on the counter.

Sentiment meter favours bulls

Overall, market breadth was in favour of gainers as 2,039 stocks ended in the green, while 1,369 names settled with cuts.

Podcast: Are midcap IT stocks more lucrative than the big boys?

As the three big boys of Indian IT services – TCS, Infosys and Wipro – came out with their results last week, analysts were left busy hunting for catalysts that can trigger the next round of re-rating in the entire IT pack. Does the Q3 result and management guidance give confidence to keep buying more IT stocks?


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