Here’s how analysts read the market pulse:
Gaurav Ratnaparkhi of Sharekhan said that the short-term range has shifted higher. “Nifty50 is expected to march towards 61.8 per cent and 78.6 per cent retracement of the entire decline from 18,604 to 17,613,” he said.
Mazhar Mohammad of Chartviewindia.in said the short-term trend has reversed in favor of bulls. “Sustaining above 17,836 level can Nifty50 strengthen its upswing towards its interim top present around 18,342 levels,” he said.
That said, here’s a look at what some of the key indicators are suggesting for Tuesday’s action:
Dow Jones hits record high
The Dow hit a record high on Monday as the passage of a $1 trillion infrastructure bill lifted industrials, materials and other economy-focused sectors, while Tesla fell on top boss Elon Musk’s plan to sell about a tenth of his stake. At 9:54 a.m. ET, the Dow Jones Industrial Average was up 170.49 points, or 0.47 per cent, at 36,498.44, the S&P 500 was up 8.77 points, or 0.19 per cent, at 4,706.30 and the Nasdaq Composite was up 25.84 points, or 0.16 per cent, at 15,997.43.
European shares struggle for direction
European stocks hit pause on Monday after a record run as investors treaded cautiously ahead of U.S. inflation data, while a clutch of disappointing earnings countered the impact of a rise in oil stocks. The pan-European STOXX 600 gained 0.05 per cent after hitting intra-day record highs on Friday.
Tech View: Trend reversal on the offing
Analysts indicated that the Nifty50’s close above the 21-day moving average today signals a likely reversal in trend after bearishness throughout the past two weeks. Levels around 18,350 may pose a key hurdle while support for the index is seen at around 17,800 levels, analysts said.
F&O: Hope remains high
In the derivatives segment, traders aggressively bought the out-of-money call options of the benchmark index suggesting that they see scope for more gains. The 18,500 strike price call option saw the highest addition of open interest in the session followed by 18,100 and 18,400.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Union Bank of India, Indian Oil, RVNL, Karur Vysya Bank, and Manappuram Finance.
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 Federal Bank, Lemon Tree Hotels, Divi’s Lab, Goldiam International, Parag Milk, and L&T Infotech. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms
IndusInd Bank (Rs 3117 crore), RIL (Rs 2331 crore), SBI (Rs 1929 crore), HDFC (Rs 1621 crore), Tata Motors (Rs 1585 crore), HDFC Bank (Rs 1502 crore), Divi’s Lab (Rs 1261 crore), Tata Power (Rs 1256 crore), Muthoot Finance (Rs 1180 crore) and Canara Bank (Rs 1153 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with the highest trading turnovers in the day.
Most active stocks in volume terms
Vodafone Idea (Shares traded: 11.3 crore), YES Bank (Shares traded: 6.9 crore), Bank of Baroda (Shares traded: 6.6 crore), Union Bank of India (Shares traded: 5.7 crore), PNB (Shares traded: 5.6 crore), Tata Power (Shares traded: 5.4 crore), Canara Bank (Shares traded: 4.8 crore), SAIL (Shares traded: 4.1 crore), and BHEL (Shares traded: 4.0 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Barbeque-Nation, Prince Pipes, Union Bank of India, VIP Industries, Muthoot Finance and JK Cement witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure
Destiny Logistics, Jiyo Eco-Products, Airo Lam, and CarTrade Tech witnessed strong selling pressure and hit their 52-week lows, signaling bearish sentiment on these counters.
Sentiment meter favours bulls
Overall, the market breadth remained in favour of the bulls. As many as 303 stocks on the BSE500 index settled the day in the green, while 197 settled the day in the red.
Podcast: What were the key reasons for Monday’s rally?
The BSE barometer Sensex jumped about 480 points to settle close to 60,550. Among its broader peers, Nifty50 gained more than 150 points to close a couple of points below the 18,070 mark. Broader markets ended higher, outperforming the headline peers. BSE midcap and smallcap indices ended a per cent higher each. Fear gauge India VIX jumped about 4 per cent but stayed below 17-level. What were the key reasons behind today’s rally?