Monday's Trade Setup: Sensex, Nifty Likely To Open In Green, RIL AGM In Focus; 3 Stocks To Buy

Indian market is set to witness a green opening on Monday tracking positive global cues after the Jackson Hole meeting where Fed's chair Jerome Powell indicated to proceed carefully in raising key rates, however, did not shun the possibility of a hike in upcoming policies. Powell said the monetary policy will be tighter for a longer period. In the early hours, Gift Nifty traded higher, hinting at a positive start for Sensex and Nifty 50. Asian stocks surged with Hong Kong and Chinese shares outperforming. In the previous session, Sensex and Nifty 50 ended in red due to broad-based selloffs globally.

Gift Nifty, formerly known as SGX Nifty, traded at 19,277.0, up by 39.5 points or 0.21% at 7.30 am on Monday. The index opened at 19,237.5 and traded in the range of intraday high and low of 19,289.0 to 19,271.5 respectively.

On Monday, the largest company in India in terms of market share, Reliance Industries will hold its 46th annual general meeting (AGM) virtually, involving its chief Mukesh Ambani's speech to shareholders for plans and key developments. Hence, RIL's stock will be in focus.

In the early trade, Asian shares traded higher after US Federal Reserve Jerome Powell's speech at the Jackson Hole meeting. However, treasury yields picked up momentum as well with two-year notes which are highly sensitive to the Fed's monetary policy, breaching above 5% mark. Also, US benchmark contracts were steady, while major currencies performed in narrow ranges.

Japan's Nikkei 225 jumped 1.5%, while South Korea's KOSPI and Australia's ASX 200 climbed nearly a per cent. Hong Kong's Hang Seng and China's mainboard Shanghai Composite Index were top gainers with an upside of around 2.2% and 2.5% respectively.

Investors took comfort from the easing in the decline of China's industrial profits which was released on Sunday. Also, the Chinese authorities lowered the stamp duty on stock trades for the first time since 2008 and also pledged to slow the pace of IPOs.

Wall Street ended on a green note on Friday, following the Jackson Hole meeting. The Dow Jones Industrial Average and S&P 500 indexes ended up by 0.7% each, while the tech-heavy index Nasdaq Composite outperformed with a 0.9% upside.

At home, last week on Friday, Sensex ended at 64,886.51, down by 365.83 points or 0.56%, while Nifty 50 dipped by 120.90 points or 0.62% to end at 19,265.80. Similarly, the BSE Midcap and Smallcap index also dipped by 262.25 points and 86.78 points respectively. Capital goods, auto, banking, pharma, consumer durables and metal stocks were the biggest draggers.

In the trading week from August 21 to 25, Sensex shed 156.51 points or 0.24%, while Nifty 50 ended lower by 97.45 points or 0.50%.

Monday's Trade Guide:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects the Nifty Spot Index to find support around 19,100/19,050 during Monday's trade, while resistance is seen at 19,400/19,450. Further, the Bank Nifty spot index is likely to find support in the range of 43,700/43,650 and resistance is seen between 44,700/44,750.

Intraday Stock Picks:

Parekh has recommended 3 stocks to buy on Monday:

- Buy Century Plyboards at Rs 663 with a stoploss of Rs 653 for a target of Rs 690.

- Buy Surya Roshni at Rs 852.70 with a stop loss of Rs 840 for a target of Rs 880.

- Buy Redington at Rs 156.60 with a stop loss of Rs 153 for a target of Rs 164.

According to Santosh Meena, Head of Research, Swastika Investmart Ltd, the past week marked the fifth consecutive week of losses on Dalal Street, but broader market indices managed to hold their ground despite prevailing challenges. The market was influenced by a combination of factors including escalating US bond yields, concerns stemming from China, and the downward pressure exerted by heavyweight players like Reliance and HDFC Bank.

However, this week, Santosh believes that Reliance AGM, global cues, and macro numbers will guide the market.

Also, Ajit Mishra, SVP - Technical Research, Religare Broking said, "We are eyeing 19,100 as the next support. However, a mixed trend on the sectoral front would continue to offer trading opportunities on both sides so plan your trades accordingly."

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.