Trade Setup Tuesday: Key Factors To Dictate Sentiments In Sensex, Nifty Today; Stocks To Buy

Indian market is likely to open in red on Tuesday tracking weak global cues. Also, after Sensex and Nifty 50 hit new lifetime highs, some profit bookings are expected, however, broadly the uptrend is likely to continue in the remaining weeks of 2023. In early trade, Gift Nifty was down, while Asian shares tumbled as focus shifted towards US job data. Meanwhile, Wall Street ended lower overnight as megacaps witnessed steep selloffs owing to a spike in treasury yields.

On December 4th, Sensex and Nifty recorded the biggest single-day upside in 2023. After market hours on Monday, Sensex ended at 68,865.12, zooming by 1,383.93 points or 2.05%. While Nifty climbed by 418.90 points or 2.07% to end at 20,686.80. Overall, on this day, Sensex and Nifty recorded a huge upside of 1437.03 points and 435 points respectively. {image-stocks3-1701743733.jpg www.goodreturns.in}

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd said, "The rally was on expected lines as the ruling party's strong performance in state elections gave confidence to investors that culminated into a massive upsurge with key benchmarks scaling record highs. India's strong growth prospects going ahead along with moderating inflation and return of foreign investors should augur well for domestic markets in the run-up to the Union Budget in February."

Further, Tapse said, "Despite overbought technical conditions, the good news is that the short-term technical outlook for Nifty continues to be in favour of the bulls, with support placed at 20529-20321 levels and resistance at 20750-21051."

Siddhartha Khemka, Head - of Retail Research, Motilal Oswal Financial Services, said, " We expect market sentiment to strengthen further as the ongoing pre-election rally is quite strong now. Given the government's focus approach towards long-term capex across key areas, we expect BFSI, Industrials, Real Estate, Auto and Consumer Discretionary to do well going forward."

To investors, Ajit Mishra, SVP - of Technical Research, at Religare Broking said, "The buoyancy in the banking pack is leading from the front now while others are playing a supportive role and we feel the same trend could continue in the coming days. Besides, cues are favourable from the global front too, further adding to traders' comfort. On the index front, Nifty may take a breather around the 20,750 zone and expect the 20,300-20,400 zone to act as a cushion in case of any profit-taking. We recommend staying with the trend and utilizing a dip or consolidation as a buying opportunity."

On Nifty 50, Rupak De, Senior Technical analyst at LKP Securities said, the index kicked off with a gap up, propelled by BJP's exceptional performance in the state election. Technically, the Nifty had already surged past the critical resistance level of 19850. Since then, there has been a significant shift in Put positions towards higher strike prices, foreseeing a robust upward rally in the near future. The overall sentiment appears highly bullish, until Nifty fall below 20400. On the higher end, the index might move towards 21000.

Furthermore, on Bank Nifty, Kunal Shah, Senior Technical & Derivative analyst at LKP Securities said, the index bulls made a strong comeback, surpassing the all-time high levels and dispelling the bearish sentiment. The momentum is anticipated to persist, with robust support identified at the 46000-45800 zone, serving as a cushion for the bulls. The ongoing momentum rally has the potential to propel the index higher towards the levels of 47000/48000.

For Tuesday, Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher has recommended buying in three stocks. These are:

- BUY NFL (NATIONAL FERT) at 74.10 stoploss 73 Target 77

- BUY GNA AXLES at 435.75 stoploss 429 Target 450

- BUY RITES at 479.60 stoploss 473 Target 495

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor 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.