Trade Setup: Key Factors To Drive Sensex, Nifty On June 26; Larsen, Olectra Green, City Union Bank Top Picks

Indian stock market is likely to open between flat to mild gains in the opening bell of Wednesday. In the early trade, Gift Nifty traded marginally up and ranged between 23,695 and 23,708.5. Defence stocks like Mazagon Dock Shipbuilders, HAL, and Bharat Dynamics will be in focus on Wednesday. Other stocks that will trend are NTPC, M&M Financial Services, and Coforge among others.

There are no stocks added to the F&O ban list on June 26. However, stocks like GNFC, Indus Towers, Punjab National Bank, and SAIL are retained in the list, while Balrampur Chini Mills, Chambal Fertilisers and Chemicals, Granules India, Piramal Enterprises exited the list.

The analyst expects Sensex and Nifty to maintain positive momentum while tracking global trends. US economic data, while excitement about the upcoming Budget 2024 announcement and onset of a full-fledged monsoon will further influence the sentiment.

Meanwhile, Asian stocks traded mixed with decline seen in Australian and South Korean shares, while Japan's Nikkei 225 held steady.

Overnight, Wall Street also saw mixed trends with S&P 500 and Nasdaq halting a three-days losing streak and ending higher by 0.4% and 1.3% respectively, driven by a strong rebound in AI giant Nvidia stock. On the other hand, Dow Jones slipped by over 299 points.

June 26 Trade Guide:

Vinod Nair, Head of Research, at Geojit Financial Services, said, "Amidst moderate consolidations and sector rotations, the market is moving upwards due to expectations from the upcoming budget. Additionally, the progress of the monsoon is being watched for insights into the consumption outlook."

As per Ajit Mishra - SVP, Research, Religare Broking, Nifty has finally surpassed the 23,600 hurdles after two weeks of consolidation, reaching a new record high. We maintain a positive outlook on the index, now targeting the next milestone of 24,000.

Mishra believes the current buoyancy in banking, coupled with notable strength in IT, will dictate the trend, while other sectors may contribute on a rotational basis. Traders should align their positions accordingly and avoid a contrarian approach.

Moreover, Siddhartha Khemka, Head - of Retail Research, at Motilal Oswal Financial Services said, " The current account deficit reduced to 0.7% of GDP in FY24 from 2% in FY23 and recorded a surplus of 0.6% of the GDP in Q4 due to higher service exports. Even in the upcoming budget, the focus will remain on fiscal consolidation along with growth-oriented measures aimed at addressing rural stress. Hence, we expect the market to maintain its positive momentum as we draw nearer to the event."

Market Technical Forecast:

In its technical view, Prabhudas Lilladher said that Nifty has indicated a series of strong positive candles formation on the daily chart to breach above the resistance zone of 23650 levels and with a breakout confirmed has strengthened the bias and sentiment to anticipate further rise in the coming sessions. With the RSI on the rise and getting better, the Index has a near-term target of 23800 levels and thereafter, can scale 24500 zone with strength sustaining."

On Bank Nifty, the brokerage said, BankNifty witnessed a stellar performance with frontline private banks gaining strength to indicate a breakout above the 52000 zone and has opened the gates for further higher targets of 53500 and 55100 levels in the coming days.

Prabhudas suggests that one can watch for ICICI Bank, Axis Bank and HDFC Bank which have indicated prominent strength to carry on with the positive move further ahead. The support for the day is seen at 23550 levels while the resistance would be seen at 23900 levels. BankNifty would have the daily range of 52200-53300 levels.

Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher expects Nifty to have support of 23,550 on Wednesday and resistance around 23,900. While Bank Nifty is expected to find support and resistance at 52,200 and 53,300 respectively.

Stocks To Buy Today:

Koothupalakkal recommends buying in three stocks on June 26. They are:

- BUY LARSEN & TOUBRO cmp 3587.80 Stop Loss 3515 Target 3740

- BUY CUB cmp 168.23 Stop Loss 165 Target 176

- BUY OLECTRA GREEN cmp 1808 Stop Loss 1770 Target 1880

In the previous session, Sensex ended at 78,053.52, up by 712.44 points or 0.92% after touching new lifetime high of 78,164.71. Nifty 50 closed at 23,721.30, higher by 183.45 points or 0.78% after hitting historic high of 23,754.15 on June 25.