Trade Setup For Monday: Major Key Factors To Know Before The Opening Bell; Intraday Stocks To Buy

The Gift Nifty traded lower on Monday, hinting a bearish start for Indian markets in the opening bell, while Asian shares traded on a mixed note. However, treasuries were broadly muted, and the dollar retreated against a basket of currencies after its recent robust rally. Traders will react to the two-day G20 summit, and global trends ahead of key inflation data that is lilely to provide some clarifty on further rate hikes from the US Federal Reserve and RBI. In the previous session, Sensex and Nifty 50 settled on a higher note.

Both India and the US will announce their CPI data later this week.

Gift Nifty, formerly known as SGX Nifty, traded at 19,918.0, down by 20.0 points or 0.10% at 7.36 am, on Monday. The index opened at 19,938.0 and traded in the range of intraday high and low of 19,940.0 to 19,917.0 respectively.

Monday's Trade Guide:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects the Nifty Spot Index to find support around 19,700/19,650 during Thursday's trade, while resistance is seen at 20,000/20,050. Further, the Bank Nifty spot index is likely to find support in the range of 44,800/44,750 and resistance is seen between 45,600/45,650.

To investors, Ajit Mishra, SVP - Technical Research, Religare Broking said, "Markets may take a breather after the recent surge but the tone is likely to remain positive. In case of any dip, we expect Nifty to respect 19650 now. Since all sectors are now participating in the move, we recommend focusing on stocks, which are showing relatively higher strength within the sector.

Nifty 50 Support Level:

In his technical view for Nifty 50, Rupak De, Senior Technical analyst at LKP Securities said, looking ahead, only a decisive move above the 19900 level has the potential to propel the index towards the 20200 mark. On the flip side, there was substantial Put writing at the 19700 level, providing strong support for the Nifty.

Bank Nifty Support Level:

In case of Bank Nifty, Kunal Shah, Senior Technical and derivative analyst at LKP Securities said, the next significant hurdle on the upside is situated at 45,500, where the highest open interest is concentrated. The index maintains a "buy on dip" mode, with robust support seen at the 44,800 levels, underlining the bullish sentiment in the market.

Stock News Today:

Stocks in the news are -- Rishabh Instruments, Ratnaveer Precision Engineering, Vakrangee, Adani Enterprises, SJVN, Schaeffler India, and Gateway Distriparks.

F&O Ban List:

Under the F&O ban list, the exchange NSE added Chambal Fertilisers and Chemicals on September 11, while stocks like Balrampur Chini Mills, Delta Corp, Hindustan Copper, Indiabulls Housing Finance, India Cements, Manappuram Finance, Punjab National Bank and SAIL were retained on the list. However, BHEL has exited the list after meeting the criteria.

Intraday Stock Picks Today:

Parekh has recommended 3 stocks to buy on Monday:

- Buy Hero MotoCorp Ltd at Rs 3008 with a stop loss of Rs 2960 for a target of Rs 3140.

- Buy Heritage Foods at Rs 271.95 with a stop loss of Rs 267 for a target of Rs 292.

- Buy Linde India at Rs 6530 with a stop loss of Rs 6440 for a target of Rs 6850.

Market Performance for September 8

On September 8th, Sensex surged by 333.35 points or 0.50% to end at 66,598.91. After extending their new record highs of 32,692.74 and 38,369.21, the BSE Midcap and Smallcap index ended with a surge of 297.07 points and 165.32 points respectively.

Of the total 3,823 stocks traded on BSE, 1,983 stocks were positive, 1,711 stocks declined and 129 stocks were muted. A total of 326 stocks touched new 52-week highs and 15 stocks struck their 52-week lows.

Meanwhile, Nifty 50 jumped by 92.90 points or 0.47% to settle at 19,819.95 on Friday. Bank Nifty zoomed 278.05 points or 0.62% to end at 45,156.40.

Further, the foreign institutional investors (FIIs) were net sellers with an outflow of Rs 224.22 crore in Indian stocks on September 8. On the contrary, domestic institutional investors (DIIs) made a robust buying of Rs 1,150.15 crore worth of equity shares.

In the trading week from September 4th to 8th, Sensex gained by 1,109.01 points or 1.7% and Nifty 50 soared by 306.05 points or 1.6%.

On the weekly performance, Vinod Nair, Head of Research at Geojit Financial services said, "Domestic indices experienced a gradual rally throughout the week, buoyed by strong domestic macroeconomic data such as robust GDP and PMI figures, which painted a positive outlook for the domestic market. Despite a mixed global trend marked by weak cues, Indian equities remained resilient, supported by this strong economic outlook. Global concerns were sparked by a surge in crude oil prices, August's US jobless claims data, weak Chinese service PMI and trade figures, and rising gas prices due to strikes in Australia. However, in the broad market, mid- and small-cap stocks attracted strong buying interest, even though their valuations were relatively high. Moreover, heightened order inflows made sectors like infrastructure and realty particularly attractive to investors during the week."

Nair added, currently, the market is eagerly awaiting data on inflation and industrial production to provide further guidance."

Foreign Funds Flow:

As per NSDL data, from September 1 to September 8th, FPIs are net sellers with an outflow of Rs 4,203 crore in Indian equities.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "Net FPI investment in September has turned negative. As per NSDL data FPIs through 8th September have sold equity for Rs 4402 crores. If we exclude the bulk deals and investment through the primary market, the sell figure in the cash segment rises to Rs 8832 crores. This trend reversal in FPI investment from buying in the last three months to selling in September is mainly due to the rising US bond yields and the uptrend in the dollar index. FPIs can be expected to turn buyers when the dollar index and US bond yields decline, which, in turn, will depend on the incoming US inflation and growth data."

According to Vijayakumar, a significant trend in FPI investment is their consistent buying in capital goods and power. This explains the smart uptrend in power stocks and capital goods stocks like L&T.

"FPI selling in financials is keeping the prices of the banking bluechips low. This is an opportunity for retail investors since this segment is doing well and the stocks are fairly valued," he added.

Global Trends:

Asian shares traded on a mixed note on Monday. Japan's Nikkei 225 dipped 0.2%, on the contrary, South Korea's KOSPI inched up by 0.2% and Australia's ASX 200 was marginally up. Notably, the Hong Kong share took a massive hit, nosediving by 1.44%, but China's mainboard Shanghai Composite Index was up by 0.5%.

Japenese shares and its currency yen took centre stage after the Bank of Japan governor Kazuo Ueda gave potentially hawkish remarks for upcoming policies. The yen has gained by 0.6% against the US dollar, and not just that, the 10-year yield of the government bond climbed its highest level since 2014.

Further, as per the Bloomberg report, US stock futures were little changed early Monday after shares saw small moves at the end of the week, with the S&P 500 edging higher after a three-day drop. Nvidia Corp. and Tesla Inc. weighed on the mega-cap space, while Apple Inc. bounced after a rout that erased $190 billion in value just a few days before the unveiling of the iPhone 15, new smartwatches and the latest AirPods.

On Friday, Wall Street ended slightly high ahead of US inflation data due on September 13. The Dow Jones Industrial Average advanced by 75.86 points, the S&P 500 index edged higher by 0.14%, and the tech-heavy Nasdaq Composite index was also marginally up by 12.69 points.

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.