Ahead of Market: 10 things that will decide stock action on Monday

Nifty 50 hit a fresh record high on Friday and logged its best week in five months as strong macroeconomic data added to optimism over the global interest rate outlook.

The blue chips Nifty 50 and BSE Sensex gained 2.39% and 2.29%, respectively, led by a rise in energy stocks. Faster-than-expected quarterly economic growth and acceleration in factory growth in November supported the rise in domestic equities.

Here’s how analysts read the market pulse:
“Nifty continues to ascend as the bulls maintain control. A consolidation breakout on the weekly time frame seems probable, paving the way for a further rally in the index. The sentiment remains upbeat, marked by a bullish crossover in the weekly RSI. At the lower end, support stands firm at 20,200; any declines could be seen as buying opportunities as long as it holds above this level. On the higher end, resistance is anticipated around 20,450-20,500,” said Rupak De, LKP Securities.

Shrey Jain, Founder and CEO of SAS Online, said, “Data signals a potential rally for Nifty, projecting an upward move to 20,600 in the coming sessions, with a robust support level at 20,150. However, there might be a pause in case of unfavorable election results. The overall trend remains positive, painting an optimistic picture for the market.”

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

US Stocks Advance
US stocks advanced on Friday, starting December with a broad rally as remarks from Federal Reserve Chairman Jerome Powell bolstered the view that interest rates have peaked.The Dow Jones Industrial Average rose 0.8%, while the tech-heavy Nasdaq Composite Index finished the day up 0.6%. Meanwhile, the S&P 500 rose 0.6% to 4,594.63 — its highest level since March 2022.

European Shares Extend Gains
European shares extended their gains from November on Friday, propelled by sharp rises in miners and as eurozone bond yields continued to fall on growing expectations of interest rate cuts. The pan-European STOXX 600 rose 1.0% to its highest level since August, after a monthly gain of 6.4% in November. It closed higher for a third straight week, supported by weekly gains in rate-sensitive real estate stocks.

Tech View: Long bull candle
Nifty on Friday ended 135 points higher in uncharted territory above 20,250-zone to form a reasonable positive candle on the daily chart. On the weekly chart, a long bull candle was formed.

The short-term trend of Nifty continues to be positive, and one may expect further upside in the coming week. The next upside levels to be watched are around 20510 (50% Fibonacci projection, taken from March 23 bottom-Sept 23 top-Oct 23 bottom). Immediate support is at 20140, said Nagaraj Shetti of HDFC Securities.

Stocks showing bullish bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of REC, Laxmi Organic Industries, Macrotech Developers, PNB, Bank of India, and Apollo Tyres 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 signaling weakness ahead
The MACD showed bearish signs on the counters of IRB Infra Developers, Devyani International, Balkrishna Industries, Ajanta Pharma, EIH, and Eris Lifesciences among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
HDFC Bank (Rs 1,727 crore), RIL (Rs 1,713 crore), ICICI Bank (Rs 1,605 crore), Axis Bank (Rs 1,583 crore), ITC (Rs 863 crore), NTPC (Rs 788 crore), and Tata Motors (Rs 745 crore) among others 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
Tata Steel (Shares traded: 3.1 crore), NTPC (Shares traded: 2.9 crore), Power Grid (Shares traded: 2 crore), ITC (Shares traded: 1.9 crore), ICICI Bank (Shares traded: 1.6 crore), Axis Bank (Shares traded: 1.4 crore), and HDFC Bank (Shares traded: 1.1 crore) among others were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of NTPC, Axis Bank, L&T, Apollo Hospital, Bajaj Finserv, Grasim Industries, and BPCL among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
No major stock hit its 52-week low on Friday.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 2,109 stocks ended in the green, while 1,638 names settled 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)

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