Chandan Taparia of Motilal Oswal Financial Services said till the index sustains below 11,333-11,300 zones, a bounce could be sold for further weakness towards 11,000 and 10,880 zones while on the upside medium term, hurdle is shifting lower to 11,450 zones.
Vinod Nair of Geojit Financial Services said markets seem to be consolidating and hence investors are advised to stay cautious.
Shrikant Chouhan of Kotak Securities said in case the index drops below 11,100, it could fall to 10,900 level.
“This is where the support of Fibonacci retracements and back- to-back supports of 200-day EMA at 10,850 and 200-day SMA at 10780 are placed at. The strategy for now should be to buy on dips around 10,900 levels and sell around 11,300 levels,” he said.
That said here’s a look at what some of the key indicators are suggesting for Wednesday’s action:
US stocks crawl higher on Amazon, Apple boost
The S&P 500 and the Nasdaq edged higher on Tuesday, led by a bounce in shares of Amazon.com and Apple, while uncertainty over more U.S. fiscal stimulus kept trading in Dow constituents muted. The Dow Jones Industrial Average was down 11.07 points, or 0.04%, at 27,136.63, the S&P 500 was up 8.47 points, or 0.26%, at 3,289.53, and the Nasdaq Composite was up 28.53 points, or 0.26%, at 10,807.33.
European shares bounce on tech support
European stocks bounced on Tuesday after a sell-off in the previous session, as technology and healthcare stocks gained, but worries about new coronavirus restrictions in Britain and elsewhere kept travel stocks under pressure. The pan-European STOXX 600 index rose 0.8%, recovering from its worst fall in three months, with technology stocks that have outperformed this year, rising 1.6%.
Tech View: Nifty selling likely on any upside
Nifty50 dropped for the fourth straight day on Tuesday and fell below the psychologically important 11,200 level. The index, which formed a Bearish Belt Hold-like candle on the daily chart, has been forming lower highs and lows for two sessions, suggesting a downward shift in supports. A close below the 50-day exponential moving average (EMA) has just added to the negative outlook. Analysts said any upside in the near future would be susceptible to selloffs.
Check out the candlestick formations in the latest trading sessions
F&O: Cooling VIX holds out hope
India VIX fell 3.52 per cent from 22.18 to 21.41 level. The slight cooling down of volatility despite the weakness in the market indicates some sort of a rangebound move in the coming sessions with the upside capped. Options data suggested a wider trading range between 11,000 and 11,500 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Tuesday showed bullish trade setup on the counters of Jubilant Life Sciences, I G Petrochemicals, Vaishali Pharma, Ramky Infrastructure and Pearl Polymers.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of IDFC, M&M, Indian Energy Exchange, Dish TV India, Marksans Pharma, Strides Pharma Science, Jamna Auto Industries, TVS Motor, Dabur India, Voltas, IOL Chemicals, The Ramco Cements, Hero MotoCorp, Suven Life Sciences, Century Textiles, Welspun Corp, Religare Enterprises, Advanced Enzyme Tech, Berger Paints, Bata India, Praj Industries, Cyient, Info Edge (India), Tata Elxsi, Caplin Point Lab, Siemens, PI Industries, Century Plyboards, OnMobile Global, Poly Medicure, Grindwell Norton, Gujarat Apollo Industries, Crest Ventures and Honda India Power among others.
Tuesday ’s most active stocks
Dr. Reddy’s Labs (Rs 3972.83 crore), RIL (Rs 3572.78 crore), TCS (Rs 1884.16 crore), HCL Tech (Rs 1784.24 crore), Maruti Suzuki (Rs 1720.80 crore), IndusInd Bank (Rs 1461.38 crore), Bajaj Finance (Rs 1385.97 crore), Infosys (Rs 1272.36 crore), Tata Motors (Rs 1162.28 crore) and Axis Bank (Rs 1148.51 crore) were among the most active stocks on Dalal Street on Tuesday in value terms.
Tuesday ’s most active stocks in volume terms
Vodafone Idea (shares traded: 43.39 crore), YES Bank (shares traded: 12.47 crore), Ashok Leyland (shares traded: 9.17 crore), Tata Motors (shares traded: 8.73 crore), ZEEL (shares traded: 5.42 crore), BHEL (shares traded: 5.27 crore), Indiabulls Housing Finance (shares traded: 5.24 crore), SBI (shares traded: 5.12 crore), IDFC First Bank (shares traded: 4.88 crore) and Federal Bank (shares traded: 3.72 crore) were among the most traded stocks in the session.
Stocks seeing buying interest
TCS, Hexaware, Hathway Cable and Ruchi Soya Industries witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Tuesday signalling bullish sentiment.
Stocks seeing selling pressure
Kuantum Papers, Libas Designs, Sumit Woods, Share India Securities and Coal India Ltd witnessed strong selling pressure in Tuesday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, market breadth remained in favour of bears. As many as 109 stocks on the BSE 500 index settled the day in green, while 389 settled the day in red.
Podcast: Can this stock correction deepen? >>>
Domestic shares fell nearly 1 per cent today as concerns over a second wave of coronavirus cases and fears of fresh lockdowns in Europe weighed on domestic investor sentiment. Losses in index heavyweights RIL, HDFC twins and Maruti Suzuki dragged Sensex lower by 300 points to 37,734, while Nifty fell some 97 points to 11,153. We caught up with Ajit Mishra of Religare Broking to try and understand the market undercurrent.