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

The Indian market is likely to open in red on Wednesday tracking a feeble sentiment of global cues. In the early hours, Gift Nifty traded in red, while Asian markets were mixed with the Hong Kong index underperforming the most. The rise in oil prices and treasury yields dragged equities broadly. Wall Street ended lower as well. In the previous session, Sensex and Nifty 50 settled higher, while midcap and smallcap stocks outperformed.

Gift Nifty, formerly known as SGX Nifty, traded at 19,655, down by 15.5 points or 0.08% at 7.35 am, on Wednesday. The index opened at 19,670.5 and traded in the range of intraday high and low of 19,679.5 to 19,654.5 respectively.

Further, Asian shares traded mixed after Wall Street tumbled and also spike in crude oil prices raised concerns over inflation. Also, treasuries gained momentum, while the dollar weakened slightly.

As per the Bloomberg report, oil steadied near the highest since November. Its recent gains pose a headwind for much of Asia and put upward pressure on inflation, which in turn keeps policy interest rates high and drags on economic growth. Brent rose above $90 a barrel Tuesday as the largest OPEC+ producers extended their supply cuts to year-end.

Japan's Nikkei 225 jumped 166.65 points, while South Korea's KOSPI and Australia's ASX 200 tumbled by 0.5% each.

Australian shares are in focus after its Reserve Bank kept key interest rates unchanged for a third month in a row at 4.10%.

Notably, the Hong Kong share took a massive hit, nosediving by 0.9%, and China's mainboard Shanghai Composite Index also plunged by 0.4%.

In August, China's official composite PMI which includes both manufacturing and non-manufacturing activity, inched higher to 51.3 as compared to 51.1 in the previous month.

Owing to a surge in crude prices and treasury yields, US stocks plunged overnight. Also, investors assessed the path of interest rates ahead they await a host of views from Fed speakers scheduled this week. The Dow Jones Industrial Average slipped by 195.74 points, the S&P 500 index shed 0.4%, and the tech-heavy Nasdaq Composite index dipped marginally.

At home, Sensex surged by 152.12 points or 0.23% to end at 65,780.26, while Nifty 50 jumped by 46.10 points or 0.24% to settle at 19,574.90 on Tuesday. The BSE Midcap and Smallcap index outperformed by rising 345.71 points and 230.41 points respectively. Broad-based buying was seen across indices with consumer durables, IT, healthcare and capital goods emerging as top gainers.

Wednesday's Trade Guide:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects the Nifty Spot Index to find support around 19,500/19,450 during Wednesday's trade, while resistance is seen at 19,700/19,750. Further, the Bank Nifty spot index is likely to find support in the range of 44,200/44,150 and resistance is seen between 45,000/45,050.

Intraday Stock Picks:

Parekh has recommended 3 stocks to buy on Wednesday:

- Buy CanFin Home at Rs 782.90 with a stop loss of Rs 770 for a target of Rs 820.

- Buy Finolex Cables at Rs 1136.50 with a stop loss of Rs 1120 for a target of Rs 1180.

- Buy Auro Pharma at Rs 851.60 with a stop loss of Rs 837 for a target of Rs 890.

Also, Ajit Mishra, SVP - Technical Research, Religare Broking said, "Nifty has reached closer to the resistance of 19,650 and needs participation from banking to surpass the same. We feel traders should maintain caution in stock selection citing overbought indications, especially in midcap and smallcap space."

In his technical view for Nifty 50, Rupak De, Senior Technical analyst at LKP Securities said, "Nifty has sustained a breakout from a descending channel on the daily chart. The trend will remain favourable as long as the bulls can maintain Nifty above 19,440. A "buy on dips" strategy should be the preferred approach until Nifty falls below 19,440. Resistance on the upper end is positioned at 19,600, and if breached, the index could potentially move higher."

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.