Trade Setup Monday: Nifty Support Level From 21,500-21,600; Key Factors To Drive Market

Indian market may open with a cautious tone on Monday with the main focus now on the Q3 earnings season that will be kickstarted by tech giants like TCS, Infosys, and Wipro. In the early trade of January 8th, Gift Nifty was marginally up, while Asian stocks traded narrowly as investors awaited key inflation dates from big countries like the US, Japan and China. Notably, on Monday, trading in Japenese market will be closed.

On January 8, Nifty is expected to range from 21,500 to 21,600 levels, while can scale up to 21,800 levels. These levels are likely to continue, however, the sentiment is seen to be broadly positive.

Last week, mixed jobs and activity data dampened the mood in the global market. Domestic equities too ended on a mixed note with Sensex down by 150.13 points or 0.21%, and Nifty 50 edged up by 10.65 points or 0.05% in the overall trading week from January 1st to 5th.

In the previous session, Sensex ended at 72,026.15 up by 178.58 points or 0.25%, while Nifty 50 closed at 21,710.80, higher by 52.20 points or 0.24%.

Prashanth Tapse, Senior VP (Research), Mehta Equities said, "As valuations are getting expensive, investors are taking exposure to select frontline stocks with the focus shifting to corporate earnings season."

Similarly, Vinod Nair, Head of Research, at Geojit Financial Services said, "On the domestic front, the market is moving towards the results season, and we expect the exuberance of the broader index may be tested if the December quarter earnings do not justify the valuation."

Monday Trade Guide:

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, "We expect the market to take cues from the upcoming earning season which will be kick-started by TCS and Infosys on 11th January. HCL Tech, Wipro, and HDFC Life are a few others that will announce their results next week. Healthy pre-quarterly business updates indicate that the earnings growth momentum is likely to continue in Q3 as well. Overall we expect markets to remain in a positive range. Stock-specific action will gather pace with the start of earning season."

Further, Ajit Mishra, SVP - Technical Research, Religare Broking said, Nifty is likely to spend some more time within the 21,500-21,800 zone citing mixed cues but tone is likely to remain positive. Traders should thus maintain their focus on stock selection and risk management. In the absence of any major event, the performance of the global indices especially the US would remain in the focus for cues in the coming sessions.

Technical Outlook For Monday:

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher expects Nifty to find support in the range of 21,600 to 21,550 and resistance around $21,850 to 21,900. Further, Bank Nifty is likely to find support in the range of 47,900 to 47,850, and resistance should be between 48,600 to 48,650.

Technically, on Nifty, Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said, "Following a rapid rebound from its positional support at 21500, bullish activity has resumed in the market, with buying interest evident during dips. The prevailing sentiment is bullish, but Nifty encounters initial resistance at 21750, facing selling pressure. Immediate support rests at 21600. A conclusive close above 21750 levels could propel Nifty towards the 22000 mark, signalling further upward movement."

Moreover, on Bank Nifty, Shah said, "Exhibiting a robust recovery from the 47500 support level, Bank Nifty showcases active bullish activity, rebounding from the 14-day moving average support at 47800. Closing above 48200 is crucial, as it could propel the index towards 48500 and 48800 levels. The immediate support for Bank Nifty stands at 47800, indicating a key level to monitor in the current market scenario."

Stocks To Buy On January 8:

Koothupalakkal has recommended buying three stocks today. These are:

- BUY TCS: CMP At Rs 3737 With Stop Loss 3685 For Target Of Rs 3860.

- BUY KAJARIA CERAMICS: CMP At Rs 1343 With a Stop Loss Of Rs 1322 For a Target Of Rs 1420.

- BUY POONAWALLA FINCORP: CMP At Rs 458.90 With a Stop Loss Of Rs 452 For a Target Of Rs 485.

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.