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Ahead of Market: 10 things that will decide D-Street action on Tuesday

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Even as the global market mood remained mixed, Indian equities continued their northward journey with the indices scaling fresh all time highs. Nifty galloped to a new high of 19,732 intra-day, but ended 0.75% higher at 19,711. Similarly, Sensex also notched a new high of 66,656 levels and settled at 66,590, up 529 points or 0.8%. Sectorally, all the indices ended in the green, except Nifty Auto and Realty. The market mood got a boost after HDFC Bank reported healthy Q1 earnings.

Here’s how analysts read the market pulse:
“Overall, we expect the momentum to continue with intermittent minor declines. Financial space will remain in focus on the expectation of good results from other BFSI heavyweights (IndusInd Bank, ICICI Pru., ICICI Lombard and ICICI Bank this week) after HDFC and mid-sized banks reported impressive numbers. With LTI Mindtree and Tata Elxsi results today (Monday) and LTTs results tomorrow (Tuesday), the IT sector would be in the limelight. On the global front, investors will keep an eye on the release of US retail sales and IIP data which will be released on Tuesday, Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services, said.

“With a broad-based buying and positive momentum, the rally is expected to continue, possibly challenging the psychological level of 20000 in the near term with immediate resistance around 19850 – 19900. Traders are advised to stay optimistic, avoid contra bets, and look for opportunities to enter long positions during intraday dips. Immediate support levels are likely to be around 19600, followed by the ‘Flag’ breakout levels at 19500,” Rajesh Bhosale, Technical Analyst at Angel One, said.

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

US market
The S&P 500 and the Dow edged up on Monday, as investors awaited quarterly results from industry heavyweights through the week, while Apple and Tesla boosted the tech-heavy Nasdaq. Second-quarter earnings are gathering momentum, with Tesla due to report on Wednesday, while Bank of America , Morgan Stanley, Goldman Sachs and Netflix are also lined up through the rest of the week. At 9:48 a.m. ET, the Dow Jones Industrial Average was up 20.57 points, or 0.06%, at 34,529.60, the S&P 500 was up 2.83 points, or 0.06%, at 4,508.25, and the Nasdaq Composite was up 33.78 points, or 0.24%, at 14,147.48.

Seven of the 11 major S&P 500 sectors declined in early trading, led by utilities, which shed 0.6%.

European shares
European shares fell on Monday as luxury group Richemont slumped on weaker-than-expected organic sales growth and lacklustre economic growth in China raised concerns about demand from the world’s second-biggest economy. The pan-European STOXX 600 index was down 0.3% by 8:02 GMT, with luxury giants at the forefront of the selling pressure.Shares of the world’s second-biggest luxury firm Richemont dropped 8.0% and were set for their sharpest one-day percentage fall in over a year after weakness in the Americas weighed on first-quarter organic sales growth.

Tech View: Long bull candle
A long bull candle was formed on the daily chart, which indicates sharp upside breakout of the recent sideways range movement in the market. Nifty is in a sharp up trended movement and we observe higher high and higher low formation on the daily chart. Lack of sharp selling participation has been observed during recent higher lows. This reflects the strength of an upside momentum in the market.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Firstsource Solutions, Rama Steel Tubes, Sterling and Wilson, Hindustan Copper and LT Foods 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 Bharti Airtel, MRPL, JSW Steel, BPCL and Vascon Engineers, 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 4089 crore), RIL( Rs 2851 crore), Infosys (Rs 1662 crore) and ICICI Bank (Rs 1564 crore) 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
YES Bank (Shares traded: 17.25 crore), Vodafone Idea (Shares traded: 16.43 crore), Suzlon Energy (Shares traded: 12.96 crore) and PNB (Shares traded: 6.09 crore) among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of Jindal Saw, Ratnamani Metal, RBL Bank, Caplin Point, eClerx Services and Bajaj Electricals among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
Shares of Penta Gold, Vinny Overseas, Jet Airways and Tirupati Forge, among others, hit their 52-week lows, signaling bearish sentiment on the counters.

Sentiment meter favours bulls
Overall, market breadth favoured bulls as 1,993 stocks ended in the green, while 1,676 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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