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

The Indian market is likely to open in green on Monday tracking positive trends of global cues. In the early hours, Gift Nifty also traded flat, while Asian markets rallied with the Hong Kong index outperforming. Trading in US stocks will not be open today. In the previous session, Sensex and Nifty 50 settled higher, driven by strong buying in metal, auto and banking stocks. In the trading week from August 28 to September 1, Sensex and Nifty 50 have gained by a per cent.

Gift Nifty, formerly known as SGX Nifty, traded at 19,550.5, up by 3 points or 0.02% at 7.14 am, on Monday. The index opened at 19,547.5 and traded in the range of intraday high and low of 19,573.0 to 19,534.5 respectively.

Further, Asian shares traded broadly high after US job data that supported the expectations of the Federal Reserve's monetary policy tightening nearing its end. Japan's Nikkei 225 jumped 136.88 points, South Korea's KOSPI index soared by 0.91%, and Australia's ASX 200 gained by 0.5%.

Notably, the Hong Kong share outperformed by rallying about 1.4%, and China's mainboard Shanghai Composite index also gained by 0.4%.

The US market will be closed on Monday due to the Labor Day holiday. However, on Friday, Wall Street showed mixed performance with the tech-heavy index Nasdaq Composite down marginally. Meanwhile, the Dow Jones Industrial Average climbed by 115.80 points, and the S&P 500 index also inched higher by 0.2%.

Also, Bloomberg reported that Tesla Inc dropped over 5 per cent, while energy shares rallied as oil topped $85 a barrel, with West Texas Intermediate futures climbing for an eighth straight day.

At home, Sensex ended at 65,387.16, soaring by 555.75 points or 0.86%, while Nifty 50 surged by 181.50 points or 0.94% to end at 19,435.30 on Friday. Bank Nifty rallied by 446.95 points or 1.02% to settle at 44,436.10. Also, the BSE Midcap and Smallcap index advanced by 235.02 points and 276.86 points respectively. Metal stocks outperformed their counterparts, with a strong upside also seen in auto, banking, oil & gas and IT stocks. However, pharma stocks were top bears.

Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd said, "After enduring a five-week losing streak, the market managed to break free with its most significant single-day gain in the past two months. The Sensex surged by an impressive 556 points, reaching a level of 65,387, while the Nifty recorded a remarkable gain of 182 points, landing at 19,435. During this notable rally, the Nifty exhibited a strong move upwards, gaining 0.8%, while the Nifty Bank followed suit with a 0.4% increase. The Midcap segment experienced a substantial surge of 2.5%, and the Smallcap stocks made a remarkable leap of 4.3%."

Monday's Trade Guide:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects the Nifty Spot Index to find support around 19,300/19,250 during Monday's trade, while resistance is seen at 19,600/19,650. Further, the Bank Nifty spot index is likely to find support in the range of 44,000/43,950 and resistance is seen between 45,000/45,050.

Intraday Stock Picks:

Parekh has recommended 3 stocks to buy on Monday:

- Buy Parag Milk at Rs 199 with a stop loss of Rs 195 for a target of Rs 220.

- Buy M&M Finance at Rs 299 with a stop loss of Rs 295 for a target of Rs 317.

- Buy Power Grid at Rs 252 with a stop loss of Rs 246 for a target of Rs 265.

Also, Ajit Mishra, SVP - Technical Research, Religare Broking said, "We are seeing a tussle around the short-term moving averages (20 EMA and 50 EMA) and need a decisive close above 19,500 in Nifty to prompt further recovery. On the sectoral front, auto, IT and metal look promising while defensive viz. FMCG and pharma may continue to witness a subdued trend. Traders should align their positions accordingly and prefer stocks that are attracting consistent buying."

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, 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.