“We’re already witnessing volatile swings across the board and do not expect any relief from that front in the near future. Considering the scenario, traders should prefer defensives and other low beta stocks until we see some stability,” he said.
Shrikant Chouhan of Kotak Securities said the Indian market is expected to remain volatile. “Buying is advisable if Nifty comes back to 11750/11700 levels with a final stop loss at 11650. On the higher side, 11900/11950 would be the resistance zone, where one needs to book profits on long positions,” he said.
Mazhar Mohammad of Chartviewindia.in said as the index managed a decisive close above its near-term hurdle of 11,750 levels, it should ideally head towards 11,922 levels in the next session.
That said, here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
Wall St jumps on bets of Biden victory, stimulus hopes
US stocks jumped on Tuesday as investors bet that one of the country’s most divisive presidential races would end with a clear victory for Democratic nominee Joe Biden and a swift deal on more fiscal stimulus. All 11 major S&P indexes were up in early trading, led by financial, healthcare and industrial stocks. The Dow Jones Industrial Average was up 2.06% while the S&P 500 rose by 1.74%.
European stocks extend gains on commodity, banking boost
European shares extended their recovery rally on Tuesday with investors putting coronavirus worries on the back burner for now, as attention turned to the US presidential election. The pan-European STOXX 600 index rose 1.2%, bouncing off five-month lows hit last week on worries over new partial lockdowns across the continent. Growth-sensitive cyclical sectors such as oil and gas, miners, banks and automakers led the rally – all rising more than 2%.
Tech View: Nifty forms long bullish candle
Nifty50, which has been seeing buying at lower levels for a couple of sessions, rallied over 1 per cent on Tuesday, and formed a long bullish candle on the daily charts. Analysts said the index may attempt to reclaim the 11,900-11,950 range or go higher in the coming sessions. The index formed a Long Bullish Candle with a gapup start and the intraday upside gap remained unfilled, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
Check out the candlestick formations in the latest trading sessions
F&O: India VIX eases 3.85%
India VIX fell 3.85 per cent from 25.21 to 24.24 levels. However, volatility is rising since the last four weeks and needs to cool down for the market to stabilise ahead of the US election outcome. Since it is the beginning of a new derivative series, Options data lay scattered at various strike prices. Maximum Put open interest was seen at 11,000 followed by 11,500 levels, while maximum Call OI was seen at 12,000 followed by 12,500 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of SBI, ICICI Bank, Jamna Auto Inds., LIC Housing, Bharat Electronics, Fortis Healthcare, United Spirits, Escorts, National Fertilizers, TVS Motors, City Union Bank, IIFL Finance, GIC Housing, Magma Fincorp, Exide Industries, SBI Life Insurance, Kesoram Industries, Centrum Capital, Alembic Pharma, Liberty Shoes, Emami, Siemens, TVS Electronics, Vertoz Advertising, Ajanta Pharma, VLS Finance, CESC, Allcargo Logistics, Satia Industries, Khadim India, Rites and ICRA among others.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of HFCL, IDBI Bank, LT Foods, Ester India, Optiemus Infracom, NIIT, Religare Enterprises, Thyrocare Tech, Uflex, Texmo Pipes, ABB India, JBM Auto, Websol Energy System, Orient Bell, Plastiblends Industries and Tide Water Oil, among others.
Tuesday’s most active stocks
RIL (Rs 7,664.59 crore), ICICI Bank (Rs 2,701.84 crore), HDFC (Rs 1,873.33 crore), HDFC Bank (Rs 1,750.37 crore), Bajaj Finance (Rs 1,543.42 crore), SBI (Rs 1,413.93 crore), Axis Bank (Rs 1,381.66 crore), Cadila Healthcare (Rs 1,332.96 crore), IndusInd Bank (Rs 1,260.56 crore) and NTPC (Rs 1,038.03 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.
Tuesday’s most active stocks in volume terms
NTPC (shares traded: 11.81 crore) , Vodafone Idea (shares traded: 10.74 crore) , PNB (shares traded: 7.24 crore), SBI (shares traded: 6.99 crore), ICICI Bank (shares traded: 6.18 crore), Tata Motors (shares traded: 5.21 crore), Ashok Leyland (shares traded: 5.01 crore), YES Bank (shares traded: 4.72 crore), Uttam Value Steel (shares traded: 4.27 crore) and RIL (shares traded: 4.09 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Cadila Healthcare, Tanla Solutions, APL Apollo Tube, Ruchi Soya Industries and Adani Gas witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday, signalling bullish sentiment.
Stocks seeing selling pressure
WABCO India, Computer Age Management Services , GE Power India, Mittal LifeStyle, Sintercom India and Hemisphere Properties India witnessed strong selling pressure in Tuesday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 292 stocks on the BSE 500 index settled the day in green, while 204 settled the day in red.
Podcast: Can bank stocks continue this run?>>>
Public sector lender SBI rallied more than 4 per cent ahead of Wednesday’s Q2 earnings. Canara Bank, Indian Overseas Bank and Jammu & Kashmir Bank also gained over 1 per cent each. Will the momentum sustain in bank stocks going ahead? We caught up with Ajit Mishra of Religare Broking, to try and understand the market undercurrent.
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