Trade Setup For Tuesday: Sensex, Nifty Likely To See Cautious Start; 3 Intraday Stocks Picks

Indian market is likely to see between flat to green start on Tuesday following the positive trend of global cues ahead of macroeconomic figures. In the early hours, Gift Nifty traded flat but in red, hinting at a cautious tone in the opening bell of Sensex and Nifty 50. However, Asian shares surged, along with US and European stocks. In the previous session, Sensex and Nifty 50 ended higher due to broad-based buying with the exception of IT stocks.

Gift Nifty, formerly known as SGX Nifty, traded at 19,347.5, down by 5.5 points or 0.03% at 7.08 a.m. on Tuesday. The index opened at 19,353 and traded in the range of intraday high and low of 19,370.5 to 19,345.0 respectively.

In the early trade, Asian stocks traded higher tracking positive Western markets as now focus shifts to a host of economic data scheduled over the next few days that is expected to give hints for a further outlook of global central banks' monetary policy. Japan announced its unemployment rate at 2.7% in July 2023, which accelerated for the first time in four months.

Japan's Nikkei 225 jumped 109.25 points, while South Korea's KOSPI edged up by 0.3%, and Australia's ASX 200 advanced by half a per cent. Hong Kong's Hang Seng index outperformed its counterparts by advancing 135.01 points or 0.74%, while China's mainboard Shanghai Composite Index traded steadily.

After no surprise in the Jackson Hole meeting, traders were optimistic in global cues with Wall Street trying to regain lost ground in August month during the remaining few days. Also, European markets surged. Investors will now focus on US inflation and jobs data, coupled with stimulus announcements from Beijing.

Overnight, the Dow Jones Industrial Average jumped over 213.08 points or 0.62%, while the S&P 500 index climbed 27.60 points or 0.63%. The tech-heavy Nasdaq Composite index soared by 114.48 points or 0.84%.

At home, Sensex ended at 64,996.60, up by 110.09 points or 0.17%. while Nifty 50 edged higher by 40.25 points or 0.21% to end at 19,306.05 on Monday. Meanwhile, the BSE Midcap and Smallcap index outperformed with a surge of 181.45 points and 242.48 points respectively. Capital goods, auto, banking, and pharma stocks were top gainers, while IT stocks emerged as laggards. Due to the hawkish remarks made in the Jackson Hole meeting, IT stocks faced a selloff over concerns of further rate hikes, most likely in November policy, while other indices remained positive.

In the trading week from August 21 to 25, Sensex shed 156.51 points or 0.24%, while Nifty 50 ended lower by 97.45 points or 0.50%.

Tuesday's Trade Guide:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects the Nifty Spot Index to find support around 19,200/19,230 during Monday's trade, while resistance is seen at 19,380/19,400. Further, the Bank Nifty spot index is likely to find support in the range of 44,000/44,050 and resistance is seen between 44,900/45,000.

Intraday Stock Picks:

Parekh has recommended 3 stocks to buy on Tuesday:

- Buy Kotak Mahindra Bank at Rs 1790 with a stoploss of Rs 1740 for a target of Rs 1900.

- Buy India Cements at Rs 239 with a stop loss of Rs 230 for a target of Rs 275.

- Buy Laxmi Organic Industries at Rs 285 with a stop loss of Rs 260 for a target of Rs 350 - 375.

Also, Ajit Mishra, SVP - Technical Research, Religare Broking said, "We feel it is a breather after the recent fall and traders should continue with negative bias in the index. At the same time, a mixed trend on the sectoral front would continue to offer opportunities on both sides so participants should focus on stock selection and maintain a hedged approach."

Disclaimer:

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