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Ahead of Market: 12 things that will decide stock action on Wednesday

MUMBAI: Nifty50 formed a bearish inverted hammer-like pattern on the daily chart on Tuesday as the benchmark index slipped below the psychologically crucial support level of 17,000 points.

Here’s how analysts read the market pulse:-
Chandan Taparia of Motilal Oswal Securities said that Bearish Inverted Hammer indicates that follow up activity is missing and every bounce is being sold into. “As long as the index holds below 17,200, any bounce could be sold into. A weakness may be seen towards 16,800 and 16,500 levels. Medium term hurdles can be seen at 17,350 and 17,500 levels,” Taparia said.

Mazhar Mohammad of said unless the Nifty50 manages a sustainable close above 17,000 level, the index can breach the recent corrective swing low of 16,782 levels.

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

US shares drop 1% after Powell’s comments
Wall Street’s main indexes extended declines in choppy trading after Federal Reserve Chair Jerome Powell said the risk of higher inflation has increased and that it was appropriate to consider wrapping up tapering a few months sooner. At 10.02 pm, the Dow Jones Industrial Average was down 458.64 points, or 1.31%, at 34,677.30, the S&P 500 was down 58.76 points, or 1.26%, at 4,596.51, and the Nasdaq Composite was down 193.42 points, or 1.23%, at 15,589.41.

European shares slide on Modernaa’s warning
European stocks slid after Moderna warned current vaccines might be less effective at fending off the Omicron variant, and after eurozone inflation spiked to a record high. Around 9 pm, FTSE 100 was down 0.4 per cent at 7,084.12, DAX slipped 0.4 per cent to 15,223 and EURO STOXX50 lost 0.5 per cent at 4,089.

Tech View: Index may find support at 16,800
Analysts said the index may find some support near 16,800 while they see some resistance for the index at 17,200 levels. Technical analysts suggested that any rallies in the index shall remain capped around 17,300 levels.

F&O: Consolidation ahead
In the derivatives segment, traders sold both the out-of-money call and put options of the Nifty50 index indicating that they are indecisive about the direction of the market.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Welspun India,

, Vikas WSP, Dr. Lal Pathlabs, and Ipca Labs.

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

, Poonawalla Fincorp, Adani Enterprises, Coffee Day, and MTNL. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value terms
Tata Power (Rs 4871 crore), Zomato (Rs 3927 crore), MindTree (Rs 3899 crore), SRF (Rs 3855 crore), RIL (Rs 3600 crore), Mphasis (Rs 3283 crore),

(Rs 3041 crore), IRCTC (Rs 2969 crore), Infosys (Rs 2538 crore) and Ipca Labs (Rs 2190 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 highest trading turnovers in the day.

Most active stocks in volume terms
Vodafone Idea (Shares traded: 34.4 crore), Zomato (Shares traded: 25.8 crore), Tata Power (Shares traded: 22.3 crore), YES Bank (Shares traded: 18.8 crore), REC (Shares traded: 11.6 crore), Suzlon Energy (Shares traded: 11.0 crore), Coal India (Shares traded: 5.7 crore), PNB (Shares traded: 5.2 crore), and SAIL (Shares traded: 5.0 crore) were among the most traded stocks in the session.

Stocks showing buying interest
KPIT Tech, Timken India, Orient Electric, Rajesh Exports, Ratnamani Metal and Tata Tele witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.

Stocks seeing selling pressure
CreditAcess Grameen, Bombay Burmah, and Hero MotoCorp 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 304 stocks on the BSE500 index settled the day in the green, while 196 settled the day in the red.

Podcast: Will the market continue to be volatile?

The domestic equity market continued on its roller coaster ride on Tuesday as the benchmark indices traded in a wide range. However, they settled lower as worries over the Omicron variant kept traders on the edge. WHO and the CEO of Moderna too raised concerns over the new virus. The pessimism pushed the panic button among the traders and the selloff dragged the markets in negative territory. The BSE barometer gyrated in a range of 1,300 points.

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