MUMBAI: Nifty50 on Monday formed a bullish candle on the daily chart as the benchmark closed higher after three days of losses. For the day, the index closed at 17,929.65, up 258 points or 1.5 per cent.

Here’s how analysts read the market pulse:

Gaurav Ratnaparkhi, Head of Technical Research of Sharekhan said the hourly chart suggests that Nifty50 had formed a base triangle on October 29. “The Nifty50 is now heading towards the 18,000-mark, which is a key level to watch out for. If the bulls manage to cross that level on a closing basis the short-term range will shift higher,” he said.

Mazhar Mohammad of Chartviewindia.in said Nifty50 is still trading below its 20-day moving averages and, hence, it is too early to conclude that bottom is in place at the recent low of 17,613-level. “This pullback shall swing shall have a logical target of 18,224 level. More strength in the index shall be expected only on a close above 18,342 level,” he said.

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

Wall St rises as focus turns to Fed

The Nasdaq index hovered at a record high on Monday boosted by gains in Tesla and Meta Platforms, although investors refrained from making big bets ahead of the Federal Reserve’s potential move to start paring support for the world’s largest economy. At 12:01 p.m. ET, the Dow Jones Industrial Average was up 46.29 points, or 0.13 per cent, at 35,865.85, the S&P 500 was up 1.95 points, or 0.04 per cent, at 4,607.33, and the Nasdaq Composite was up 61.69 points, or 0.40 per cent, at 15,560.08.

European shares climb to record highs

European stocks hit record highs following upbeat earnings reports, while a surge in banking shares buoyed eurozone markets. The pan-European STOXX 600 gained 0.6 per cent, surpassing its previous all-time high of mid-August, as the global mood was supported by Japan’s post-election boost and stabilizing coal prices in China.

Tech View: Not out of the woods

Today’s gains after three days of losses provided much-needed reprieve to the bulls. However, technical analysts warned that the benchmark index was still not out of the woods yet as the Nifty50 has to close above the 18,000 points on a closing basis to sustain the pullback.

F&O: Hope remains high

Traders today covered their short positions in the 18,000-strike price call option of the Nifty50 index suggesting that they expect today’s pullback to sustain. Traders also bought out-of-money call options of the index beyond the 18,000 strike price.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of SAIL, Tata Steel, RIL, United Spirits, and DCB Bank.

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 Cholamandalam, Union Bank of India, Manappuram Finance, Indian Bank, IRB Infra, Kalpataru Power, Mahindra CIE, KEC International, SML Isuzu, Goldiam International, and Sundaram Finance. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms

SAIL (Rs 2549 crore), IRCTC (Rs 2534 crore), RIL (Rs 1803 crore), Tata Motors (Rs 1654 crore), HDFC (Rs 1426 crore), Tata Steel (Rs 1316 crore), Tata Power (Rs 1309 crore), IndusInd Bank (Rs 1276 crore), Bharti Airtel (Rs 1218 crore) and SBI (Rs 1053 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: 22.4 crore), SAIL (Shares traded: 20.1 crore), YES Bank (Shares traded: 9.5 crore), Tata Power (Shares traded: 5.6 crore), BHEL (Shares traded: 4.7 crore), PNB (Shares traded: 4.3 crore), IDFC First Bank (Shares traded: 3.8 crore), NALCO (Shares traded: 3.6 crore), Tata Motors (Shares traded: 3.4 crore) and Bandhan Bank (Shares traded: 3.1 crore) were among the most traded stocks in the session.

Stocks showing buying interest: Century Ply, Sun TV, Blue Dart, Triveni Turbine, 3i Infotech and Grindwell Norton witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Asian Hotels, Jio Eco Products, Ramco Systems, and International Conveyors witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on these counters.

Sentiment meter favours bulls

Overall, the market breadth remained in favour of the bulls. As many as 355 stocks on the BSE500 index settled the day in the green, while 145 settled the day in the red.

Podcast: Is the worst of the correction behind us?
The BSE barometer Sensex soared more than 830 points to settle a dozen points below 60,150. Its broader peer, Nifty50, settled at 17,930 as the NSE barometer zoomed about 260 points. Nifty is just 70 points shy of hitting the 18,000 mark once again. Broader markets ended higher as the BSE midcap index jumped 2 per cent, whereas the BSE smallcap index ended one per cent higher. Fear gauge India VIX eased over a per cent. What caused today’s rally? Is the worst of the correction behind us?


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