Trade Setup: Bears Or Bulls? What Will Drive Sensex, Nifty On Wednesday - 3 Stocks To BUY

Trading in Gift Nifty hinted at a positive start for Indian stock market on Wednesday despite mixed global cues as optimism for upcoming Union Budget 2024 rises and onset of Q1 earnings season. In the early trade, Gift Nifty touched yet another new high of 24,372.5 before correcting and trading up by 0.3%. Meanwhile, Asian stocks advanced as well with Japan's Nikkei 225 and Hong Kong's Hang Seng rising by nearly 1%. This comes after Wall Street rallied overnight with S&P 500 closing above 5,500 for the first time and Nasdaq nearing record high.

Investors positive sentiment is followed by US Federal Reserve's Chair Jerome Powell's statement who welcomed the latest easing in inflation data and signalled that they are getting back to disinflationary path. However, Powell reiterated FOMC's need to see more evidence before lowering key interest rates.

On July 3, Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher expects Nifty to find support at 24,000 and resistance is seen t 24,300. Meanwhile, Bank Nifty is expected to have support and resistance at 51,800 and 52,600 respectively.

Koothupalakkal has recommended 3 stocks to buy on July 3. They are:

- BUY NIIT LTD cmp 113 Stop Loss 110 Target 120

- BUY KPIL cmp 1212 Stop Loss 1186 Target 1270

- BUY RAILTEL cmp 480 Stop Loss 470 Target 505

On the previous day, Nifty 50 index opened strong today, reaching a historic peak of 24,236.35 points early in the session. However, Nifty closed with a modest decline of 18 points, or 0.07%, settling at 24,123.85 points after market hours.

Along the similar lines, Sensex also experienced a volatile trading day. After hitting an intraday high, the Sensex pared gains and closed nearly flat with a minor decrease of 35 points, concluding the day at 79,441 points.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, "Nifty after scaling new heights above 24200 level, witnessed profit booking and closed with a miniscule loss of 18 points at 24124. Majority of the sectors including broader space ended in red. The IT sector saw a buying for the second consecutive session ahead of Q1FY25 results and a positive handover from its global peers. Niche sectors like paper too witness a rally on the buzz surrounding price hikes. Strong GST collections in June, manufacturing PMI index bouncing back to 58.3 in June, and expectation of healthy Q1 earnings has a positive impact on the market. We expect this ongoing momentum to continue with Nifty consolidating at a higher zone. While the FED Chairman Powell's speech and the release of the meeting minutes will induce some volatility."

Meanwhile, Vinod Nair, Head of Research, at Geojit Financial Services said that the investors are closely monitoring the progress of the monsoon, the forthcoming Union budget, alongside the US election, which can have potential global economic implications. Recent spikes in US Treasury yields and a gradual rise in crude oil prices are affecting market trends.

In its technical market forecast, Prabhudas Lilladher said Nifty resisted near the 24250 level and found some consolidation near the 24150 zone with the bias and sentiment maintained strong with sector-wise rotation witnessed and has near-term support at around 24000 level which needs to be sustained in the coming sessions. As mentioned earlier, the index is anticipated to further rise to have a near-term target of the 24500 zone provided the 24000 support is sustained.

For Bank Nifty, Prabhudas added, BankNifty with some heavy profit booking witnessed in some counters has indicated a Bearish Engulfing candle formation on the daily chart to slightly weaken the bias having the 51200 zone as the important support level for the index. The support for the day is seen at 79000/24000 levels while the resistance is seen at 80000/24300 levels. BankNifty would have a daily range of 51800-52600 levels.