Trade Setup For Wednesday: Sensex, Nifty Likely To See Positive Opening; 3 Stocks To Buy

Indian market may open on a positive note on Wednesday due to buoyancy in global markets. In the early hours, Gift Nifty climbed, hinting at a gap-up start in the opening bell of Sensex and Nifty 50. In the previous session, Sensex and Nifty 50 ended higher following its global cues on hopes for no more rate hikes by Fed ahead, however, the upside was limited due to lacklustre performance in heavyweight stocks.

Gift Nifty, formerly known as SGX Nifty, traded at 19,425.5, up by 78.5 points or 0.41% at 6.05 a.m. on Wednesday. The index opened at 19,347 and traded in the range of intraday high and low of 19,427.0 to 19,305.0 respectively.

In the early trade, Asian stocks traded higher tracking positive trends of US stocks. Japan's Nikkei 225 jumped 160.08 points, while South Korea's KOSPI was up by 0.9%, and Australia's ASX 200 advanced by 0.7%.

Further, Wall Street stocks had their best day in weeks after the US July job openings and labor turnover survey revealed that job openings and quits dipped --- raising expectations of a pause in rates by the US Federal Reserve in the upcoming policy. Rebound in tech stocks led the Nasdaq to its best single-day performance in a month, while the S&P 500 index saw its biggest single-day gains since early June.

Overnight, the Dow Jones Industrial Average jumped by 0.9, while the S&P 500 index climbed by a whopping 1.5%. While the Nasdaq Composite outperformed counterparts soaring by 1.74%.

At home, Sensex ended at 65,075.82, up by 79.22 points or 0.12%, while Nifty 50 edged higher by 36.60 points or 0.19% to end at 19,342.65 on Tuesday. Meanwhile, the BSE Midcap and Smallcap index outperformed the benchmarks with a surge of 137.61 points and 249.19 points respectively. Auto, consumer durables, capital goods, and metal stocks were top gainers, on the contrary, banking, healthcare and FMCG stocks were laggards.

Wednesday's Trade Guide:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects the Nifty Spot Index to find support around 19,250/19,275 during Wednesday's trade, while resistance is seen at 19,400/19,450. Further, the Bank Nifty spot index is likely to find support in the range of 44,000/44,200 and resistance is seen between 44,800/45,000.

Intraday Stock Picks:

Parekh has recommended 3 stocks to buy on Wednesday:

- Buy Navin Fluorine International at Rs 4624.90 with a stoploss of Rs 4500 for a target of Rs 4850.

- Buy Bodal Chemicals at Rs 82.70 with a stop loss of Rs 75 for a target of Rs 100.

- Buy Nippon Life India Asset Management at Rs 317.15 with a stop loss of Rs 300 for a target of Rs 360.

Also, Ajit Mishra, SVP - Technical Research, Religare Broking said, "The recent stability on the global front is prompting this pause but the tone is still negative. And, we need a decisive close above the short-term moving average i.e. 20 EMA in Nifty, which currently lies around the 19,430 level, to ease the pressure. Meanwhile, we reiterate our view to stay stock-specific and keep a check on leveraged trades."

On the Nifty 50 index, Rupak De, Senior Technical analyst at LKP Securities said that the support at the lower end remains solid at 19245, serving as a barrier to prevent further declines. On the upper end, resistance is placed at 19425; a breach of this level might lead to a more dependable rally. Expect a range-bound trading unless a clear breakout occurs on either side.

Further, on Bank Nifty, Kunal Shah, Senior Technical & Derivative analyst at LKP Securities the index remains engaged in a struggle between bulls and bears, resulting in a phase of sideways trading. The option data reflects a broad range, with notable open interest concentrations at both the 44000 put option and the 45000 call option. In terms of immediate technical levels, the index faces a resistance obstacle at 44650. A decisive breach above this level is anticipated to ignite a fresh upward movement, potentially steering the index towards the 45000 mark.

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.