Trade Setup For Wednesday: Key Factors To Dictate Sensex, Nifty 50 Performance; 3 Stocks To Buy

Indian market may witness a cautious opening on Wednesday tracking the slide in US markets as the Fed's minutes of the meeting nears. After ending on a mixed note on Tuesday, Asian counterparts are likely to witness some pullback, meanwhile, at home, there is a need for meaningful pickup in banking stocks to push Nifty 50 towards the hurdle of 19,850. Currently, Gift Nifty is trading in red.

The market is hoping for a dovish comment from US Fed especially after an easing in inflation print and traction in economic growth.

On Tuesday, Sensex ended at 65,930.77, up by 275.62 points or 0.42%, while Nifty 50 finished at 19,783.40 higher by 89.40 points or 0.45%. Bank Nifty gained by 104.20 points to end at 43,689.15. FMCG, IT and PSU banks were top bears, while sharp buying in media, metals, pharma, realty, and consumer durable stocks lifted the overall performance.

On the latest performance, Vinod Nair, Head of Research at Geojit Financial Services said, "The market exhibited positive momentum, with attention centred on the minutes of the latest Fed meeting. The declining inflation and the recent cooling job data in the US provide foundation for a dovish comment from the Fed. The drop in bond yields and the dollar index suggests mounting speculation regarding the potential peak in the interest rate cycle. This will attract funds to emerging markets. The gain in the broad market was led by consumer durables and realty, thanks to a strong rebound in festive demand."

Also, foreign institutional investors (FIIs) sold Rs 455.59 crore worth of Indian equities on Tuesday, while domestic institutional investors (DIIs) offset the foreign investors' outflow by emerging as buyers. DIIs pumped in Rs 721.52 crore in shares.

Ajit Mishra, SVP - Technical Research, Religare Broking said, "We need participation from the banking majors to overcome the hurdle at 19,850 in Nifty else the consolidation phase will continue. Meanwhile, upbeat global cues, especially from the US markets, would continue to aid the positive tone. Traders should align their positions accordingly and stay focused on stock selection."

Technically, on the Nifty 50, Rupak De, Senior Technical analyst at LKP Securities said, "The Nifty concluded with a gain after a positive trading session, maintaining a consistently positive sentiment as it consistently closed above the critical support level of 19500. Traders are advised to consider buying during dips as long as the Nifty remains above 19500. However, a drop below 19500 could potentially initiate panic among traders. Looking upwards, a rise above 19850 might spark a rally towards 20000 and beyond."

For Bank Nifty, Kunal Shah, Senior Technical and derivative analyst at LKP Securities said, "The Bank Nifty index persisted in a sideways momentum, characterized by lower volumes, and remains in close proximity to its 20-day moving average (20DMA). Immediate resistance on the upside is situated at 44,000, marked by higher call writing, and a breakthrough above this level is expected to initiate short-covering moves. On the downside, support is established at 43,300, and a breach below this level may pave the way for a decline towards 42,800."

Highlighting on intraday picks, Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher has recommended buying three stocks on November 22nd. These are:

- BUY GRSE at 809.95 stoploss 795 Target 855

- BUY IOL CHEM at 437.20 stoploss 430 Target 460

- BUY AMARA RAJA ENERGY at 655 stoploss 645 Target 690

Also, on Wednesday, five IPOs will be hitting the primary market. These would be Tata Technologies, Rockingdeals Circular Economy, Flair Writing Industries, Fedbank Financial Services, and Gandhar Oil Refinery India.

Wall Street was in deep red as investors absorbed disappointing retail results and awaited Federal Reserve meeting minutes. Notably, investors are also shifting towards artificial intelligence giant NVIDIA's earnings. At the time of writing, the Dow Jones Industrial Average slipped by 70 points, while S&P 500 index dipped 0.2%. However, the tech-heavy Nasdaq Composite index took a massive hit by shedding 0.7%.

Asian stocks settled broadly mixed with South Korean and Australian shares outperforming. However, Chinese property stocks were also in green after a Bloomberg report mentioned that the Chinese regulators are working on drafting a list of 50 developers eligible for a range of financing including China Vanke and Longfor Group Holdings

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.