Trade Setup: RBI Policy, Q3, Crude Oil, Global Cues To Influence Trading In Sensex, Nifty; Stocks To Buy

Sensex and Nifty may see a positive opening on February 7 amidst upside in global cues. RBI's policy meeting and Q3 numbers will continue to influence the mood of the market even on Wednesday. Stocks-specific actions are likely, and companies like Paytm, Jio Financial Services, HDFC Bank, and other financial services providing stocks to be in focus. Nifty is expected to have support around 21,800 levels and has the potential to cross the 22,000 mark again.

In the early deals, Asian shares jumped as investors focused on China's increasing efforts to lift its toppled share market amidst economic risks. Meanwhile, US stocks gained as well amidst hopes for quarterly results and trajectory for rate cuts by the Federal Reserve.

Moreover, Gift Nifty was marginally up and ranged between 22,129.50 and 22,100.50.

Yesterday, Sensex and Nifty witnessed a huge rally driven by outperforming IT stocks. The 30-scrip benchmark ended at 72,186.09, up by 454.67 points or 0.63%, while the 50-scrip benchmark closed at 21,929.40, up by 157.70 points or 0.72%.

On the previous day's performance, Vinod Nair, Head of Research, at Geojit Financial Services said, "The market exhibited a positive breadth, registering moderate gains, with investors showing reluctance to significantly trim their positions ahead of the RBI MPC meeting. Expectations for a dovish monetary policy buoyed sentiment in the bond market. Meanwhile, Oil & Gas stocks held a modest advance as the market weighed down geopolitical risks in the Middle East and awaited improvements in the weekly US crude inventory."

Day Trade Guide:

Prashanth Tapse, Senior VP (Research), Mehta Equities explained that after a weak start, markets quickly rebounded and maintained optimism till the close as buying gained momentum towards the fag end in IT, auto, metals and oil & gas stocks. Despite overnight weakness in US stocks and mixed Asian indices, local investors resorted to buying after yesterday's subdued close. Following the recovery, Nifty will now again aim to revisit its all-time high at the 22127 mark, while the index has a make-or-break support at the 21557 mark.

Further, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, "We expect the market to continue its positive momentum with sectorial rotations. The key event this week is RBI's monetary policy which provides direction to the market. Though RBI is expected to maintain the status quo, commentary would be eagerly eyed with regards to hint on rate cut."

Technical Outlook Today:

Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher expects the Nifty 50 to find support and resistance at 21,800 and 22,100 during the February 7th trading session. Meanwhile, Bank Nifty is expected to have support and resistance around 45,300 and 46,200 respectively.

On Bank Nifty, Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said, "The Bank Nifty index experienced a subdued trading session one day ahead of the weekly expiry, with an ongoing struggle between bears and bulls. The lack of a clear trend indicates that a breakout is awaited to determine the market direction. The support is positioned at 45500, while the immediate hurdle lies at 46000. A successful break above 46000 is anticipated to propel the index towards 46500 on the upside."

Stocks To Buy Today:

Koothupalakkal has recommended buying three stocks for the February 7th trade. They are:

- BUY DCX SYSTEMS LTD cmp 356.95 Stop Loss 350 Target 372

- BUY LAURUS LABS cmp 398.65 Stop Loss 392 Target 414

- BUY IRCTC cmp 965 Stop Loss 946 Target 1005

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.