Trade Setup Monday: Global Trends, RBI Policy, Q4 Earnings To Influence Sensex, Nifty; 3 Stocks To Buy

As the financial year 2024-25 kick-started, the Indian stock market is likely to attract gains in the opening bell. In the early trade of Monday, Gift Nifty performed positively, while broader Asian shares traded higher except Japanese shares. Also, the US market last week was higher with the S&P 500 netting its strongest first quarter in five years.

A positive candlestick is appearing as traders are buying in global shares after US inflation data backed bets for easing in policy by the US Federal Reserve this year with sooner-than-expected rate cuts.

Also, shares of KOSPI, Hang Seng and Shanghai Composite gained momentum after China's factory activity expanded for the first time in six months. However, Japanese shares tumbled after a confidence report weakened for the first time in four quarters.

Trading in the Indian stock market this week will be influenced by a flurry of big data such as US PMI and US, factory orders, US unemployment data, and RBI's first bi-monthly policy for FY25 where another status quo is expected.

Apart from global trends and economic data, industry and stock-specific performances will be seen due to auto monthly sales, metal monthly production figures, and betting ahead of the Q4FY24 earnings season.

For a continued rally, Nifty 50 is required to surpass the 22,525 level, while 22,200 could serve as short-term support as well.

Day Trade Guide:

The market ended FY24 on a strong note. As of March 28, 2024, BSE-listed firms' market cap stood at Rs 386.97 lakh crore. On the last trading day of FY24, Sensex surged by 655 points to settle at 73,651, while the Nifty 50 climbed by 203 points to reach 22,327.

Rupak De, Senior Technical Analyst, LKP Securities said, "The Nifty has rallied significantly, surpassing the 22,500 mark after maintaining momentum beyond 22,100. Furthermore, there's a clear breakout in consolidation on the daily timeframe, signalling rising optimism. Nevertheless, the Nifty encountered initial resistance near its previous swing high of 22,526. Consequently, to sustain a continued rally, it must surpass the 22,525 level decisively. On the downside, 22,200 could serve as short-term support."

Meanwhile, on Bank Nifty, Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said, "After a period of bullish resurgence, the Bank Nifty index exhibited strength by surpassing the 20-day moving average hurdle set at 47,000, backed by significant volumes. Despite this, it faced resistance around the 47,500 mark. A decisive breach above this resistance could propel the index towards the 48,000 level. Conversely, the immediate support is situated at the 47,000-46,800 zone. A conclusive drop below this support level, especially on a closing basis, might indicate a false breakout scenario."

Ajit Mishra, SVP - Technical Research, Religare Broking suggests a continuing focus on stock selection, with a preference for the index majors and large midcaps.

On April 1, Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher expects Nifty Spot Index to find support at 22,200 and resistance around 22,500. While Bank Nifty is expected to find support at 46,700, and resistance around 47,600.

Stocks To Buy On April 1: Koothupalakkal has suggested buying in three stocks on Monday. They are:

- BUY POWER GRID cmp 276.90 Stop Loss 270 Target 290

- BUY CAPLIN POINT LAB cmp 1315 Stop Loss 1385 Target 1400

- BUY DCX INDIA cmp 294 Stop Loss 287 Target 310

In a year, the 30-scrip benchmark is up by a massive 15,675.39 points or 27.055, while Nifty 50 skyrocketed by 5,246.20 points or 30.71%. In FY24, Sensex touched its all-time high of 74,245.17, and Nifty 50 clocked its lifetime high at 22,526.60.