Trade Setup Monday: Key Factors To Dictate Sensex, Nifty Today; 3 Stocks To Buy

Indian market is likely to open in green on Monday after a big win from the current government led by PM Modi in three major states of northern India. Also, global cues are positive as appetite for stocks rises after Fed officials signalled that the recent cooling in inflation rate may lead to an end in rate hike cycles. Focus will also be shifted towards RBI rate decisions, macroeconomic data like services PMI, and global trends. US stocks will be eyeing a Santa rally in the last few weeks of 2023.

On December 1st, Sensex soared by 492.75 points or 0.74% to end at 67,481.19, while Nifty 50 jumped by 134.75 points or 0.67%. Meanwhile, on the first day of December, foreign portfolio investments (FPIs) pumped in Rs 9,744 crore in Indian equities. Last week, Sensex gained by 1,499.13 points or 2.27%, while Nifty 50 surged by 437.50 points or 2.21%. The 50-scrip benchmark also touched a new all-time high of 20,291.55, while the BSE market cap crossed Rs 4 trillion.

On Monday, Prashanth Tapse, Senior VP (Research), Mehta Equities said, "A new Bull Phase with a clear support for growth awaits the market following a strong mandate for the ruling party at the Center in 3 out of 5 state poll results. A stable political environment could further boost investors' confidence and drive the markets higher, with the possibility of benchmark Nifty attaining 20500-20800 levels going ahead appears bright. Optimistic global trends including signs of foreign investors making a comeback in domestic markets are major factors that will drive the upward movement going forward."

While Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher expects the Nifty spot index to find support between 20,100/20,050, and resistance around 20,400/20,450 on Monday. Further, Bank Nifty is expected to have a support level between 44,500/44,450 and resistance around 45,200/45,250.

Koothupalakkal has recommended buying three stocks on December 4th. These are:

- BUY DATA PATTERNS at 2052 stop loss 2010 Target 2130
- BUY GREENPLY at 200.85 stoploss 197 Target 212
- BUY SCHNEIDER at 339.85 stop loss 334 Target 357

To shareholders, Ajit Mishra, SVP - Technical Research, Religare Broking said, "The rotational buying across the key sectors is helping the index to inch higher and we are now eyeing 20,500 in Nifty ahead. Apart from the domestic factors, upbeat global cues, especially the performance of the US markets, are further adding to the positivity. We thus recommend continuing with a "buy on dips" approach with a focus on stock selection."

On the technical outlook for Nifty, Rupak De, Senior Technical analyst at LKP Securities said, the index continues to ascend as the bulls maintain control. A consolidation breakout on the weekly time frame seems probable, paving the way for a further rally in the index. The sentiment remains upbeat, marked by a bullish crossover in the weekly RSI. At the lower end, support stands firm at 20,200; any declines could be seen as buying opportunities as long as they hold above this level. On the higher end, resistance is anticipated around 20,450-20,500

Further, Kunal Shah, Senior Technical and derivative analyst at LKP Securities on Bank Nifty said, the index maintained its robust bullish momentum, breaching the resistance level of 44,700. The immediate hurdle on the upside is positioned at 45,000, marked by the highest open interest on the call side. On the downside, a substantial support level rests at 44,300, serving as a protective buffer for the bulls. Any retracement towards this support presents an opportune moment for investors to initiate long positions.