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

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NEW DELHI: Hopes of a stellar earnings season from India Inc is driving buying on Dalal Street even as India continues to report an ever-increasing number of Covid-19 cases. But investors are becoming cautious.

Here’s how analysts read the market pulse:-

With Tuesday’s bullish candle, Nifty gave its highest daily close of the last 40 sessions, said Chandan Taparia of Motilal Oswal Securities, who believes that the index needs to hold on the the psychological mark of 18,000 for any upmove towards 18,200 and 18400 levels. Taparia sees support at 17,950 and 17,850 levels.

Palak Kothari of Choice Broking sees support for the index at 17,700. Kothari sees resistance at 18,100 level. Rising above the same can open the doors for 18,200-18,300 levels, the analyst said.

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

Wall St muted at open ahead of Powell testimony

Wall Street’s main indexes were subdued at the open on Tuesday ahead of Federal Reserve Chair Jerome Powell’s testimony that may offer fresh insight on policy tightening and the central bank’s plans to tackle inflation.

The Dow Jones Industrial Average fell 10.02 points, or 0.03 per cent, at the open to 36,058.85.

The S&P 500 opened lower by 1.15 points, or 0.02 per cent, at 4,669.14, while the Nasdaq Composite dropped 23.57 points, or 0.16 per cent, to 14,919.26 at the opening bell.

European shares recover
European stocks recovered some of their recent losses on Tuesday and government bond yields retreated as investors bought back into riskier assets

The STOXX index jumped 1%, snapping a three-day losing streak for its best day in nearly three weeks.

Tech View: Strong bullish candle
Nifty50 on Tuesday climbed for the third straight session in what was a volatile session for the market. The index ended up forming a bullish candle on the daily chart. Analysts said the upside hurdle of 18,200 is intact. The index may find support around 17,900-950 level, they said.

F&O: Rs 18,400 major resistance
As the last seven of eight sessions have seen buying, bulls are doubling down their bets. 18,200 to 18,400 strike prices saw massive accumulation of calls for another day, meaning they are the next resistance levels for the index.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of RBL Bank, Lasa Supergenerics, Just Dial, Varun Beverages, Vishwaraj Sugar Industries and Coffee Day Enterprises.

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 GMR Infra, Sintex Industries, Vakrangee, NIIT, L&T Foods, Piramal Enterprises and Gland Pharma. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Vodafone Idea (Rs 2640 crore), Reliance Industries (Rs 1839 crore), Greaves Cotton (Rs 1767 crore), HDFC (Rs 1127 crore), Tata Steel (Rs 1103 crore), Infosys (Rs 956 crore) and Adani Enterprises (Rs 922 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 highest trading turnovers in the day.

Most active stocks in volume terms

Vodafone Idea (Shares traded: 210 crore), Suzlon Energy (Shares traded: 25 crore), YES Bank (Shares traded: 10 crore), Alok Industries (Shares traded: 10 crore), SAIL (Shares traded: 8 crore), and Greaves Cotton (Shares traded: 8 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Greaves Cotton, Prism Johnson, Adani Green Energy, Orient Refractories, Affle India, Adani Enterprises and Tata Teleservices witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Mas Financial Services and Spandana Sphoorty witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on the counter.

Sentiment meter favours bulls
Overall, market breadth was in favour of gainers as 1,933 stocks ended in the green, while 1,513 names settled with cuts.

Podcast: What to expect from IT heavyweights’ Q3 results

Domestic equity markets extended their winning streak to a straight third session ahead of Q3 earnings announcements by IT heavyweights. High volatility marked the session ahead of Fed Chair Jerome Powell’s testimony before the US Congress later in the evening. During the session, realty and banking saw some buying, whereas metals were under pressure. What should one expect from IT major’s Q3 number tomorrow?