Trade Setup For Friday; Key Factors To Know Before Market Open; 3 Stocks To Buy

Indian market is likely to open in red on Friday tracking the bearish trend of global cues. In the early deals, Gift Nifty traded lower, while Asian shares slipped on the backdrop of multi-year high surge in treasuries. US and European stocks dipped ahead of Federal Reserve Chair Jerome Powell 's speech amidst conflict between Israel and Hamas.

The sentiment in domestic equities is likely to be under pressure, as long as Nifty 50 trades below 19,800 levels. The benchmark if slipped below 19,625, could have a potential to flip between 19,500-19,400, however, above 19,650 hurdle could take the index to above 19,850.

At home, traders are likely to pay attention to Q2 earnings season, global trends and geopolitical tensions. Major Q2 results of JSW Steel, JSW Energy, L&T Finance Holding, Hindustan Zinc, Laurus Lab, and Paytm will be announced on Friday, while focus will also be on stocks like ITC, and HUL as they declared their earnings after market hours of Thursday.

Yesterday, Sensex ended at 65,629.24, down by 247.78 points or 0.38%, while Nifty 50 ended at 19,624.70, lower by 46.40 points or 0.24%. Bank Nifty also plunged by 134.20 points or 0.31% to settle at 43,754.50.

Talking about the October 19th performance, Vinod Nair, Head of Research at Geojit Financial Services said, "Amid increasing global political strain, US treasury yield, and underwhelming IT earnings, the domestic market continued to trade with a minor cut. However, some optimism was evident in the equity market given global efforts to stabilize the West Asia conflict, which deescalated crude prices trend. Auto sector stocks outperformed, driven by Q2 results outcome. Investors are closely monitoring the Q2 earnings season, US Fed chair speak and West Asia developments."

Day Trading Guide For Friday:

In the early trade of Friday, Gift Nifty traded at 19,512.5 down by 42.5 points or 0.22%. The index opened at 19,555, and ranged between 19,573.0 and 19,503.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, US Fed chair Jerome Powell's speech late Thursday would be key trigger for the market as it will provide some clarity over future interest rate hike. This along with the escalating situation in middle east, would keep market sentiments subdued. Thus we advise investors to stay cautious in near term. On the result front, Dalmia Bharat and ultratech reported healthy numbers. Even in 2W space Bajaj Auto posted good set of number. Thus, we expect Cement and Auto sectors to remain in focus.

On October 20th, Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher expects the Nifty Spot Index to have support between 19,500/19,450, while resistance is seen between 19,750/19,800. For Bank Nifty, Koothupalakkal sees the support level ranging from 43,400 to 43,350 and resisting around 44,000/44,050 levels.

To investors, Ajit Mishra, SVP - Technical Research, Religare Broking, said, "The recent price action in index shows indecision amid mixed cues. And, earnings has cascaded the choppiness on sectoral front too, making stock selection difficult for the traders. We thus suggest limiting aggressive positions and preferring hedged trades until we see some clarity over next directional move."

Intraday Stocks To Buy On Friday:

Prabhudas Lilladher's technical analyst recommended buying three stocks during Friday's intraday trade. These are:

1. Jindal Saw: Buy at Rs 395.95 with a stop loss of Rs 390 for a target price of Rs 415.

2. HBL Power: Buy at Rs 295.60 with a stop loss of Rs 290 for a target price of Rs 312.

3. HSCL: Buy at Rs 262.25 with a stop loss of Rs 258 for a target price of Rs 277.

Nifty Spot Index:

Rupak De, Senior Technical analyst at LKP Securities said, "Nifty slipped below the consolidation range low of 19,650 and closed below it for the day. However, the 55EMA acted as a support on a closing basis. In the short term, the index might remain volatile, and a move above 19,650 could take the index towards 19,850. However, a failure to move above 19,650 might result in selling pressure once again."

Technically, Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd said, the Nifty is trading near the 50-day SMA (Simple Moving Average). For the traders now, the 50-day SMA or 19625 would act as a trend decider level. Above the same, we could see a technical bounce back till 19700-19735 levels. On the flip side, below 19625 the index could retest the level of 19520-19480.

Bank Nifty Spot Index:

Kunal Shah, Senior Technical and derivative analyst at LKP said, "The Bank Nifty index continued to experience a period of sideways consolidation, characterized by an ongoing battle between the bulls and the bears.The index currently faces immediate resistance at the 44000 level, while support is situated at 43500. A decisive breakout in either direction from this range is expected to lead to significant trending moves.The prevailing sentiment for the Bank Nifty remains tilted toward a "sell on rise" approach, implying that traders are more inclined to sell the index during price rallies. Strong resistance is observed at 44500, and a closing price above this level would indicate a resumption of the uptrend."

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author nor 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.