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

Over the past week, the BSE Sensex 30-pack has added 721.06 points or 1.32% to 53,760.78 and the Nifty has slipped 171.40 or 1.06% to 16,049.20. National benchmarks traded dismal over the week amid a record rupee, a mixed set of quarterly earnings and fears the US Fed is set to aggressively hike policy rates after inflation higher than expected.

Here is how analysts read the pulse of the market:

Vinod Nair, head of research at

said volatility reappeared and investors focused on the Fed’s policy ahead amid rising US inflation.

“Falling crude prices and reduced FII sales added optimism in the domestic market while dismal IT results, rupee depreciation and global recession fears restrain an upside important,” he added.

“The 16,000 mark is crucial, not just from a sentimental or psychological point of view. It is also a very crucial support level as it is Nifty’s 50-day DMA (daily moving average). The long-term and medium-term outlook for the market would be positive until it is above 16,000. A breach below that level would give bearish signals,” Kranthi Bathini of WealthMills Securities told ETMarkets.

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

US stocks make big gains

U.S. stocks closed sharply higher on Friday, ending several days of selloffs with a rebound fueled by upbeat earnings, strong economic data and easing fears of a bigger-than-expected interest rate hike. the Federal Reserve.

The Dow Jones Industrial Average (.DJI) rose 658.09 points, or 2.15%, to 31,288.26, the S&P 500 (.SPX) gained 72.78 points, or 1.92%, to 3,863.16 and the Nasdaq Composite (.IXIC) added 201.24 points, or 1.79%, to 11,452.42.

Rebound in European equities

Automakers and retail stocks led a rebound in European stocks on Friday after a two-day rout that saw investors grapple with shifting expectations of a U.S. interest rate hike, a political crisis in Italy and risks of recession.

The Continental STOXX 600 Index (.STOXX) ended up 1.8% after falling 2.6% in the past two sessions on fears that the US Federal Reserve could raise interest rates by 100 points base more than expected later this month.

Tech View: Inside Bar candle on the weekly chart

On Friday, Nifty50 snapped a four-day losing streak and ended above its 50-day simple moving average. The index has formed a bullish candle on the daily chart with a long lower wick suggesting a hammer-shaped reversal candle. With that, the index also reversed its lower high-low it was making in the past two sessions.

That said, the index has formed an Inside Bar candle on the weekly chart which signals a loss of momentum. Analysts said the index had support around 15,850 levels while they saw resistance for the index above 16,200 levels. It’s a bull market, they said.

Stocks Showing a Bullish Bias

The Moving Average Convergence Divergence (MACD) momentum indicator showed a bullish trade setup on the counters

, HDIL and Bharat Dynamics.

The MACD is known to signal 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 upward movement and vice versa.

Stocks Signal Weakness Ahead

The MACD showed bearish signs on the counters of

, , and . A bearish crossover on the MACD on these counters indicated that they had just begun their downward journey.

Most active stocks by value

Adani Green, TCS,

, HDFC Bank and were among NSE’s most active stocks by value. Higher activity on a counter in terms of value can help identify counters with the highest turnover for the day.

Most active stocks by volume

Vodafone Idea, Yes Bank, SAIL, Zomato and Suzlon were among the most traded stocks during the session on NSE.

Stocks showing buying interest

Aether Industries Stocks,

and witnessed strong buying interest from market participants as they hit new 52-week highs, signaling bullish sentiment.

Stocks are under selling pressure

Policy Bazaar, Birlasoft, HCL Tech, Wipro and NMDC witnessed heavy selling pressure and hit their 52-week lows, signaling bearish sentiment on the meters.

Sentiment meter favors bulls

Overall, market breadth favored winners as 1,719 stocks ended in the green, while 1,578 names settled with cuts.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)