Nagaraj Shetti of HDFC Securities said the short term trend of Nifty seems to have turned into profit booking mode.
“Unless immediate resistance of 11,600 is not broken on the upside we could see broader range movement of ups and downs in the market. Initial support is placed at 11,430-11,400 levels and a move below this area could drag Nifty down to lower 11,200-11,180 levels in the near term,” he said.
Vinod Nair of Geojit Financial Services said markets are expected to remain uncertain and investors are advised to remain cautious.
Ajit Mishra of Religare Broking said traders should maintain their focus on the sectors which are attracting buying interest and plan their trades accordingly.
“IT and pharma are currently leading the pack and likely to continue with the upward bias. On the flip side, apart from the banking index, we may see profit-taking in select metal and auto names ahead,” he said.
That said here’s a look at what some of the key indicators are suggesting for Friday’s action:
Tech sell-off weighs on on US stocks
Wall Street’s main indexes fell on Thursday after data showed high levels of weekly jobless claims, while technology-related stocks resumed their slide with Apple Inc and Amazon.com Inc among the biggest drags on the Nasdaq. The Dow Jones Industrial Average was down 172.82 points, or 0.62%, at 27,859.56, and the S&P 500 was down 28.53 points, or 0.84%, at 3,356.96.
European shares skid as Fed underwhelms
European stocks fell from a one-month closing high on Thursday after an underwhelming response to the U.S. Federal Reserve’s pledge to keep interest rates low for a prolonged period. The pan-European STOXX 600 dropped 0.9%, on course to break its four-day winning streak.
Tech View: Nifty counter-trend rally might just end
Nifty50 on Thursday saw selling pressure from the word go, and ended up forming a small bearish candle on the daily chart with a long upper wick. The formation of such a pattern a day after breaching two key hurdles suggests a false breakout, said analysts, who believe the index needs to protect its 20-day exponential moving average (EMA) to avoid any selloff. Mazhar Mohammad of Chartviewindia.in said that Thursday’s fall has triggered a sell signal on his proprietary twin momentum oscillators, which accompanied a 61.8 per cent retracement of the entire fall from the highs of 11,794-11,185 levels. He does not rule out the end of the recent counter-trend rally.
Check out the candlestick formations in the latest trading sessions
F&O: VIX needs to cool down further
India VIX moved up 2.24 per cent from 19.66 to 20.10 level. VIX needs to cool down below 20-18 zone to let the bulls have a grip for the next leg of rally. Options data suggested a higher trading range between 11,400 and 11,800 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Thursday showed bullish trade setup on the counters of Cipla, Vedanta, Cadila Healthcare, HPCL, Hikal, Ambuja Cements, DCW, Marksans Pharma, Apollo Hospitals, Piramal Enterprises, Surya Roshni, Advanced Enzyme Tech, Himatsingka, Hero MotoCorp, IOL Chemicals, Snowman Logistics, Prestige Estates, Kopran, Compuage Infocom, Rallis India, Lincoln Pharma, Cyient, JMC Projects, Gati, Ador Welding, JTEKT India, UltraTech Cement, Mahanagar Gas, Dhanuka Agritech, Aster DM Healthcare, Aurionpro Solutions, TCNS Clothing, Lokesh Machines, Sirca Paints India, TTK Healthcare, Zodiac Clothing, SIL Investments and N K Industries among others.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Spicejet, JM Financial, Tanla Solutions, Balmer Lawrie, Triveni Turbine, Mahindra Holidays, Pfizer, Gulshan Polyols, PPAP Automotive, Vaibhav Global, Punjab Chemicals, Prataap Snacks, Gallantt Metal, Plastiblends Industries, Lakshmi Machines, Naga Dhunseri Group, Pilani Investments and Eurotex Industries among others.
Thursday’s most active stocks
Dr. Reddy’s Labs (Rs 4011.57 crore), RIL (Rs 2753.08 crore), Happiest Minds Technologies Ltd. (Rs 1940.04 crore), HCL Tech (Rs 1613.06 crore), Infosys (Rs 1579.10 crore), TCS (Rs 1194.20 crore), HDFC Bank (Rs 995.67 crore), Bajaj Finance (Rs 968.28 crore), ICICI Bank (Rs 889.01 crore) and ZEEL (Rs 841.78 crore) were among the most active stocks on Dalal Street on Thursday in value terms.
Thursday’s most active stocks in volume terms
Vodafone Idea (shares traded: 18.98 crore), YES Bank (shares traded: 9.89 crore), Happiest Minds Technologies (shares traded: 5.20 crore), Tata Motors (shares traded: 4.81 crore), IDFC First Bank (shares traded: 4.44 crore), SBI (shares traded: 4.12 crore), ZEEL (shares traded: 3.80 crore), Ashok Leyland (shares traded: 3.70 crore), SAIL (shares traded: 3.58 crore) and ITC (shares traded: 3.39 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
Tata Steel (PP), J B Chem, Vinati Organics, Laurus Labs and Indiabulls Ventures (PP) witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Thursday signalling bullish sentiment.
Stocks seeing selling pressure
Blue Chip India witnessed strong selling pressure in Thursday’s session and hit its 52-week lows, signalling bearish sentiment on this counter.
Sentiment meter favours bears
Overall, market breadth remained in favour of bears. As many as 149 stocks on the BSE 500 index settled the day in green, while 348 settled the day in red.
Podcast: Is IPO mart the place to be now? >>>
Simmering tensions on India-China border and subdued global cues had a bearing on investors sentiment on Thursday, causing BSE Sensex to snap a two-day winning streak and slump some 323 points. Nifty fell 85 points to 11,519. We caught up with Vinod Nair of Geojit Financial Services to understand investment opportunities in the IPO mart.