Technical indicators like the RSI have seen a negative crossover from the overbought scenario on the daily scale, which doesn’t bode well for the bulls, but an overall lower VIX is ruling out any major fall in the market for the time being.
Rohit Singre of LKP Securities said going forward the 11,000 level will act as a make or break point for Nifty and any decisive break below this mark can lead into strong profit taking, which can drag the index towards the 10,900-10,800 zone.
On the other hand, Nifty has strong resistance near the 11,200-11,300 zone with fresh upsides only above the 11,300 level. Support for Nifty Bank stands near the 21,400-21,000 zone and resistance is near the 21,900-22,150 zone,” he said.
Vinod Nair of Geojit Financial Services said investors would be looking at commentary from today’s meeting between the PM and key economic regulators, while the stock specific action is expected to continue.
Ajit Mishra of Religare Broking said markets would first react to the earnings from index heavyweight RIL in the early trade on Friday and that may set the tone for the rest of the session. “Traders should keep a close eye on 11,050 level on the Nifty, as any breakdown of this level may trigger a fresh decline towards the 10,950 level. Else consolidation will continue. Traders should prefer hedged bets and maintain positions on both sides,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Friday’s action:
US stocks slump after historic GDP slump
Wall Street fell on Thursday following a historic contraction in second-quarter GDP and a tweet by President Donald Trump floating the possibility of delaying the U.S. November presidential elections. The Dow Jones Industrial Average .DJI was down 527.37 points, or 1.99%, at 26,012.20, the S&P 500 .SPX was down 51.63 points, or 1.58%, at 3,206.81. The Nasdaq Composite was down 115.47 points, or 1.10%, at 10,427.48.
European stocks fall on weak earnings
European shares fell on Thursday as dismal earnings reports and weaker-than-expected German GDP data took the shine off the U.S. Federal Reserve’s vow to keep stimulus taps open to shore up a coronavirus-ravaged economy. The pan-European STOXX 600 fell 0.8%, dragged by losses in carmakers, insurers and banks.
Tech View: Nifty negatively biased now
Nifty50 shed 100 points on Thursday to settle July futures & options series at 11,102. The index has been seeing selling pressure at higher levels for a few days now. Analysts said the formation of a bearish candle on the daily scale in follow-up to an indecisive Spinning Top candle in the previous session suggested that the index remains negatively biased for now.
Check out the candlestick formations in the latest trading sessions
F&O: VIX rules out any major fall
India VIX moved up 2.56 per cent to 24.72 level on Thursday. Any spike in volatility can trigger some decline, but overall lower VIX is ruling out any major fall in the market for the time being. Option data suggested a wider trading range between 10,700 and 11,500 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Thursday showed bullish trade setup on the counters of Sun Pharma., LT Foods, Central Bank, Tata Consultancy Services, UPL, EIH, Lupin, Star Cement, SBI Life Insurance, PNB Gilts, Jubilant Foodworks, Sun TV Network, Heidelberg Cement, Wockhardt, Shoppers Stop, Future Lifestyle, Nilkamal, TPL Plastech, Esab India, Crest Ventures, Gulf Oil Lubricants and Remsons Industries, among others.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of IDFC First Bank, HDFC, Shriram Transport Finance, M&M, Bharat Forge, ITI, S H Kelkar & Company, Rallis India, Dilip Buildcon, Eros International, VIP Industries, Responsive Industries, Info Edge (India), Ipca Laboratories, BEML, Aegis Logistics, Kitex Garments, Cosmo Films, CARE Ratings, Bhageria Industries, Kirloskar Oil Engine, Newgen Software Tech, Dixon Technologies, Tilaknagar Industries, Visaka Industries, APL Apollo Tubes, TCI, Gokul Agro Resources, Williamson Magor, Elgi Equipments, 5Paisa Capital and MRO-TEK Realty. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
RIL (Rs 7094.73 crore) , Dr. Reddy’s Labs (Rs 2823.25 crore) , Bharti Airtel (Rs 2498.96 crore) , Bajaj Finance (Rs 2126.71 crore) , HDFC Life Insurance Company Ltd. (Rs 1768.26 crore) , TCS (Rs 1643.35 crore) , HDFC Bank (Rs 1434.00 crore) , ICICI Bank (Rs 1420.03 crore) , Maruti Suzuki (Rs 1401.20 crore) and HDFC (Rs 1380.69 crore) were among the most active stocks on Dalal Street on Thursday in value terms.
Most active stocks in volume terms
Vodafone Idea (shares traded: 29.30 crore) , YES Bank (shares traded: 22.36 crore) , Vedanta (shares traded: 9.07 crore) , BHEL (shares traded: 4.88 crore) , SBI (shares traded: 4.84 crore) , IDFC First Bank (shares traded: 4.69 crore) , Bharti Airtel (shares traded: 4.45 crore) , Indian Oil Corp (shares traded: 4.36 crore) , ICICI Bank (shares traded: 4.08 crore) and Reliance Communications (shares traded: 3.87 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Divi’s Laboratories, Dr. Reddy’s Labs, Natco Pharma, Syngene International and Laurus Labs witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Thursday signalling bullish sentiment.
Stocks seeing selling pressure
Rajesh Exports, Aarti Surfactants, B.C. Power Controls, Borosil and Mittal Life Style witnessed strong selling pressure in Thursday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, market breadth remained in favour of bears. As many as 174 stocks on the BSE 500 index settled the day in green, while 326 settled the day in red.
Podcast: Should investors buy this dip? >>>
Domestic equity indices ended Thursday’s session in the red for the second straight day amid losses in financial stocks on negative global cues. The Sensex closed 335 points lower at 37,736 while Nifty ended 101 points down at 11,102. Will this phase of profit taking stretch further or can we expect a rebound from here on? Vinod Nair of Geojit Financial Services offers an anlysis.