Stock Market: 10 things that will decide stock action on Tuesday

On Monday, the domestic equity markets rebounded, snapping their losing streak from the previous week. The Nifty 50 index closed 0.34% higher at 24,936 points, while the S&P BSE Sensex gained 0.46%, ending the session at 81,559 points. This uptick was led by gains in banking and consumer stocks, despite ongoing concerns regarding the U.S. economy due to last week's job data. This signalled a continued labour market slowdown.

Market Analysts' Insights

According to Rupak De of LKP Securities, the Nifty remains a "sell on the rise" as long as it trades below 25,100. Resistance is expected around the 25,000-25,100 range, where sellers could re-enter. Support lies between 24,800 and 24,785, with increased selling pressure expected if the index drops below this level.

Similarly, Jatin Gedia from Sharekhan noted that Nifty has tested and held the support zone of 24,850–24,800, coinciding with the 20-day moving average and the 38.2% Fibonacci retracement level. For those holding long positions, 24,750 is considered a critical stop loss, with a break below this indicating a potential trend reversal in the short term. The next hurdle for Nifty is set at 25,000–25,100.

Global Market Trends

U.S. Markets

On Wall Street, major indexes bounced back from last week’s losses, driven by expectations of potential Federal Reserve interest rate cuts and anticipation of an upcoming inflation report. The Dow Jones rose by 0.90%, the S&P 500 by 0.61%, and the Nasdaq by 0.44% by mid-session. Ten of the eleven S&P 500 sectors gained, with industrials and financials rising by about 1.5%.

European Markets

European stocks also recovered, with the pan-European STOXX 600 index gaining 0.8%, rebounding from last week’s sharp 3.5% drop. Notably, the travel and leisure sector led the recovery, with a 2.1% rise, driven by a 5.3% gain in Entain shares. The FTSE 100 in London climbed over 1%, while the FTSE 250 rose by 0.8%.

Technical View of Nifty

A positive candle pattern on Nifty’s daily chart signals renewed buying interest following a brief correction. According to Nagaraj Shetti of HDFC Securities, Nifty has regained support at 24,900, indicating potential for further upside. However, breaching the 25,150 level is necessary to confirm a trend reversal. Immediate support is placed at 24,750.

Open Interest (OI) Data

OI data shows the highest call-side interest at the 25,000 and 25,100 strike prices, while put-side interest is concentrated at the 24,800 and 24,900 levels. This suggests these levels could act as key short-term resistance and support zones, respectively.

Stocks Exhibiting Bullish Bias

Momentum indicators, such as the Moving Average Convergence Divergence (MACD), signalled bullish trends for several stocks, including Bharat Rasayan, Jubilant Pharmova, Orchid Pharma, United Spirits, Macfos, Blue Star, and JSW Energy. The MACD's bullish crossover indicates potential upward movement in these stocks.

Stocks Signaling Weakness

Conversely, the MACD signalled bearish trends for Tata Elxsi, TVS Holdings, LTTS, Apollo Hospitals, Nelco, Venky's, Lupin, and Mankind Pharma. These stocks show early signs of downward momentum, with bearish crossovers indicating potential declines.

Most Active Stocks (Value Terms)

In value terms, the most active stocks included HDFC Bank (Rs 1,952 crore), ICICI Bank (Rs 1,698 crore), SBI (Rs 1,661 crore), and Zomato (Rs 1,529 crore). High trading turnover on these counters often signifies strong market interest and liquidity.

Most Active Stocks (Volume Terms)

In terms of volume, Vodafone Idea (62.9 crore shares), YES Bank (12.1 crore shares), Suzlon Energy (8.7 crore shares), and Zomato (5.8 crore shares) were among the most traded stocks on the NSE, reflecting substantial market activity.

Stocks with Strong Buying Interest

Stocks such as Glenmark Life, Gujarat Fluorochemicals, DOMS Industries, Godrej Consumer, HUL, Dabur India, and Jubilant Pharmova saw significant buying interest, with many reaching new 52-week highs. This signals a bullish sentiment from investors.

Stocks Facing Selling Pressure

On the downside, CSB Bank reached its 52-week low, indicating increased selling pressure on the counter, reflecting bearish sentiment among traders.

Market Sentiment

Market breadth favoured bears, with 2,390 stocks closing in the red, compared to 1,650 stocks finishing in the green. Despite the positive close for benchmark indices, broader market sentiment remains cautious amid lingering economic concerns.

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