Trade Setup: Market Shows Resilience, Nifty Inches Closer To Key Resistance

The Indian stock market exhibited resilience as it staged a rebound on Thursday. The market ended the day with healthy gains, although it fell short of crossing a crucial resistance level. As we move towards the end of the week, all eyes are on Nifty's performance, with a particular focus on key stocks like Tata Motors. Let's dive into the latest developments in the market and what lies ahead.

The market rebounded on Thursday, with the Nifty making an intraday high of 19,174, driven by a gap-up opening. However, it couldn't sustain above the important resistance level at 19,158 and eventually closed below Monday's high. This, despite ending the day with gains, left traders and investors watching closely to see if the Nifty can overcome this significant barrier.

With the Federal Reserve's announcement no longer impacting the market, the spotlight has shifted back to corporate earnings, which are now in their final stretch. One stock that investors will be closely monitoring on Friday is Tata Motors. The company reported a robust performance for the September quarter, showcasing strong margins for Jaguar Land Rover.

Foreign investors remained net sellers in the cash market on Thursday, while domestic investors were buyers. For the week, the Nifty is up 0.5%, but it needs to close above 19,047 to avoid a third consecutive weekly loss.

The Nifty Bank, on the other hand, managed to recover most of the losses from the previous two sessions and closed above the 43,000 mark. If it can close above 42,782, it will mark the index's first positive week in nearly two months.

In the futures and options market, Nifty 50's November futures witnessed a 2% increase in Open Interest on Thursday, trading at a premium of 105.6 points compared to 71.1 points previously. Nifty Bank's November futures added 1.5% or 38,460 shares in Open Interest, indicating a cautious optimism. Nifty 50's Put-Call Ratio is now at 1.01, showing an increased call bias.

GNFC remains the only stock in the F&O ban list, which continues to be closely monitored by traders.

Looking at Nifty 50 for the November 9 expiry, the Call side has seen Open Interest addition between 19,200 and 19,500 strikes, with the most significant addition in the 21,000 strike Call. On the Put side for the same expiry, the 19,050 and 19,100 strikes have seen Open Interest addition, along with the 18,000 strike Put.

Several prominent companies will be in focus today:

Tata Motors: The company reported a net profit of Rs 3,764 crore, a significant turnaround from last year's net loss. Jaguar Land Rover reported a 30.4% increase in revenue and a substantial margin expansion. They also raised their FY24 EBIT margin guidance to 8% from 6%.

Indian Energy Exchange: The net profit increased by 21.5% from last year, with revenue growing by 14%. Operating profit (EBITDA) rose by 16.5%, and the margin expanded by 180 basis points to 84.8%.

JK Lakshmi Cement: The company's revenue grew by 11.5%, and sales volume increased by 10% to 2.53 million tonnes. EBITDA rose by 29% year-on-year, and the EBITDA margin improved to 12.3% despite a 4% rise in fuel costs. They are also planning to expand the capacity of their Surat grinding unit.

Mahindra & Mahindra Finance: The company disbursed nearly Rs 5,250 crore in October, with a collection efficiency improvement to 94% from 91% last year. The company is closely monitoring stage 2 and stage 3 assets.

In global markets, Asian indices opened higher on the final trading day of the week, with a focus on upcoming Services PMI figures from China, India, and Hong Kong. Japanese markets were closed for a public holiday, but South Korea's Kospi was up 0.8%, and the Kosdaq traded with modest gains. Futures on the Hang Seng pointed towards a strong start to the trading day.

Meanwhile, on Wall Street, US markets continued their rally on Thursday as treasury yields fell. This was driven by hopes that the Federal Reserve may have completed its interest rate hikes for 2023. The Dow Jones gained 1.7%, marking its best day since June, and the S&P 500 rose by 1.9%, achieving back-to-back gains of 1% for the first time since February. The Nasdaq also had its best day since July, closing 1.8% higher. However, Nasdaq futures were trading lower following Apple's earnings announcement.

As we head into Friday's trading session, investors and traders are eagerly watching for further developments in the Indian and global markets, especially keeping an eye on key stocks and earnings reports to navigate the market's ups and downs.