Nifty technical analysis: Ahead of Market: 10 things that will decide D-Street action on Friday

Rupak De, Senior Technical Analyst at

, said, “The benchmark Nifty had started lower and slipped below 18,000 briefly. However, bulls have managed to hold the 18,000 mark on a closing basis. The trend may remain sideways as long as it remains above 18,000. On the higher end, 18,300 will continue to act as crucial resistance.”

Kunal Shah, Senior Technical Analyst at LKP Securities, said, “The bears were on the controlling side in the index throughout the day, however, the bull came in the last hour and managed to close above the crucial support zone of 41,500-41,400. To continue the strong momentum on the upside, the bulls must close the index above 42,000 where the highest open interest is built up on the call side.”

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

US market

US stocks surged, the dollar slid and Treasury yields dropped as cooler-than-expected inflation data suggested the Federal Reserve’s barrage of interest rate hikes are beginning to have their intended effect.

All three major US stock indexes rebounded sharply on the heels of Wednesday’s sell-off, and the benchmark Treasury yield touched its lowest level in weeks and the greenback plunged.

The consumer price index (CPI) showed the prices urban US consumers pay for a basket of items cooled down in October, a welcome indication that the buckets of cold water the Federal Reserve has been dumping on the economy with its hawkish monetary policy are at last being felt. The Dow Jones Industrial Average rose 780.67 points, or 2.4%, to 33,294.61, the S&P 500 gained 142.89 points, or 3.81%, to 3,891.46 and the Nasdaq Composite added 528.83 points, or 5.11%, to 10,882.01.

European shares

European shares reversed course to touch near two-month highs on Thursday as US consumer prices increased less than expected, bolstering hopes of less aggressive interest rate hikes from the Federal Reserve going ahead.

The pan-European STOXX 600 jumped 2.1%, on track for its biggest percentage gain in five weeks, while rate-sensitive sectors such as technology and real-estate surged more than 4% each. The Euro STOXX volatility index slipped to a 12-week low of 21.67 points.

The STOXX 600 index is now eying its fourth straight week of gains, also supported by a better-than-expected earnings season.

Tech View: Bearish candle

Nifty has formed a bearish candle with a gap but has managed to close above 18,000 level. Broad based indices Nifty 500 indicates slight gloomy over bulls as 127 stocks advanced while 373 declined.

There is negative crossover in RSI suggesting short term weakness. Overall, until Nifty sustains above 18100 and Bank nifty sustains above 41800, there is suggested caution as there is quite uncertainty regarding the trend.

Stocks showing bullish bias

Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trend in the counters of

, VIP Clothing, and , 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 signalling weakness ahead

The MACD showed bearish signs on the counters of

, Power Grid, NHPC, and HFCL, among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value term

Axis Bank (Rs 1,606 crore),

(Rs 1,086 crore), Nykaa((Rs 1041 crore), and HDFC Bank (Rs 965 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

( Shares traded: 12.41 crore), PNB (Shares traded: 9.74 crore), (Shares traded: 7.92 crore), Yes Bank (Shares traded: 7.15 crore) and Nykaa (Shares traded: 5.87 crore) were among the most traded stocks in the session on the NSE.

Stocks showing buying interest

Shares of

, Elecon, and , among others, witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure

Shares of Aurobindo Pharma, Quess Corp,

, and , among others, witnessed strong selling pressure and hit its 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bears

Overall, market breadth favoured losers as 1,261 stocks ended in the green, while 2,203 names ended in the red.

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