Trade Setup Thursday: Q4 Results, Global Trends, Election, What Will Move Sensex, Nifty On May 9?

Indian stock market is likely to witness a cautious start to the trading session on Thursday. In the early trade, Gift Nifty traded broadly flat while leaning towards the green zone, indicating a flat opening for Sensex and Nifty. Also, Asian stocks traded on a mixed note tracking Wall Street's tone overnight. There is a lack of fresh key triggers, however, Q4 earnings will keep stock-specific momentum.

On Thursday, Sensex support is seen around 73,000 mark, while resistence will be around 74,000. For reversel in the volatile trend, it is crucial for Nifty to hit 22,450 levels, while its support is seen at 22,150.

In the previous session, after steep selloffs, both benchmarks Sensex and Nifty recovered heavy losses but couldn't escape bears. Sensex ended at 73,466.39, down by 45.46 points or 0.06%, and Nifty 50 ended flat at 22,302.50. Bank Nifty plunged by 264.25 points or 0.55% to 48,021.10.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, Nifty recovered from lower levels to close flat at 22303. Sector-wise it was a mixed bag with buying seen at Oil & Gas, Metals, PSU Banks, and Auto. Nifty after declining for three consecutive days and shedding 416 points, saw relief today and traded sideways. However, volatility continues with India Vix at higher levels of 17. Consistent selling by FIIs, a mixed set of Q4 results, and lower turnout in the election kept investors wary.

Khemka is expecting the market to consolidate in a broader range amid nervousness surrounding the ongoing Lok Sabha election.

Meanwhile, Shrikant Chouhan, Head of Equity Research, at Kotak Securities said the short-term texture of the market is still on the weak side.

He added, that for the day traders now, 50-day SMA (Simple Moving Average) or 22350/73550 would act as a key level to watch out for. Above the same, the pullback formation is likely to continue till 22400-22425/73700-73800. On the flip side below 22240/73300, the selling pressure is likely to accelerate. Below the market could slip till 22150-22100/73000-72800.

To investors, Ajit Mishra - SVP, of Research, Religare Broking said, "With support hovering around the 22,150 mark in the Nifty and global markets maintaining stability, there's a possibility of some consolidation. Nonetheless, the prevailing sentiment is likely to remain pessimistic until the Nifty convincingly surpasses the 22,500 threshold. Traders are advised to exercise caution and maintain hedged positions."

Some of the important results scheduled to be released on May 9th are --- State Bank of India, Asian Paints, Bharat Petroleum Corporation, Indian Overseas Bank, Hindustan Petroleum Corporation, Escorts Kubota, Relaxo Footwears, Alembic Pharmaceuticals, CARE Ratings, VST Tillers Tractors, Mahanagar Gas, and Suryoday Small Finance Bank among others.

In technical terms, Prabhudas Lilladher said Nifty indicated weakness with a gap down opening to make a low of 22,180 and witnessed some recovery to close on a flat note. However, bias was still maintained with a cautious approach.

According to Prabhudas, Nifty index would have a level of 22,000 as the major support zone from current levels, and a decisive breach above 22,400 is necessary to improve sentiment.

In case of Bank Nifty, Prabhudas said that the index managed to close above the 48,000 zone, witnessing a recovery after the initial sell-off below 48,000, and has made the bias a little bit cautious, with the near term major support zone of 50 DMA lying near the 47,600 zone.

For May 9th, Prabhudas sees support for Sensex/Nifty around 73,000/22,150, while the resistant is seen at 74,000/22,450. Bank Nifty would have a daily range of 47,500 - 48,500.