Trade Setup Tuesday: Q3 Earnings Take Centrestage, Key Factors To Influence Sensex, Nifty

Indian market may see a mixed trend ahead of tech giants TCS, Infosys, Wipro, and HCL Tech's earnings later this week. On January 9th, in the early deals, Gift Nifty traded in red, while Asian stocks may see a lift after Wall Street recorded a see-saw-like trend with the Nasdaq Composite rallying 2% driven by IT stocks, and Dow Jones lagging. Notably, oil prices dipped as Saudi Arabia levied price cuts amid growing concerns over conflict in the Middle East.

On January 9th, Nifty may see support between 21,300 to 21,400, while Bank Nifty is expected to stay above the 47,000 mark.

TCS and Infosys will announce their Q3 results on January 11, followed by HCL Tech and Wipro on January 12.

On Monday, the Indian market logged sharp selling. Sensex ended at 71,355.22, down by 670.93 points or 0.93%. Nifty 50 slipped by 197.80 points or 0.91% to end at 21,513. PSU Banks, metals, FMCG, Private banks, and IT stocks were top laggards.

Trade Guide:

Explaining the latest selling, Vinod Nair, Head of Research, at Geojit Financial Services said that the market witnessed widespread selling as the euphoria over early rate cuts may diminish due to the better-than-expected non-farm payroll data from the US and the consequent rise in the US 10-year yield.

In the near term, Nair added, "Investors' trade positions will be more inclined towards the upcoming result season. While the outset may be tempered by lower expectations in the IT sector, the overall forecast for earnings growth remains optimistic, projecting double-digit figures."

Meanwhile, Siddhartha Khemka, Head - of Retail Research, at Motilal Oswal Financial Services said, "Domestic equities saw profit booking ahead of key inflation data globally and the start of corporate earnings this week. Nifty opened positive but soon succumbed under selling pressure and closed near the day's low with a loss of 198 points (-0.9%) at 21513 levels. The broader market too ended in red; down 1%. Except for Realty, all other sectors ended in red. Better-than-expected US job data last Friday, led to the concerns that the US Fed might delay the rate cut."

Khemka added, "In this context, the inflation data from the US, China and India due this week will be of key importance. This led to a rise in the dollar index along with the 10-year bond yield. Thus, overall sentiments are currently subdued in the market and could lead to more consolidation over the next few days."

Technical Outlook For January 9:

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher expects Nifty to have a support level in the range of 21,350 to 21,300 and resistance around 21,650 to 21,700. Meanwhile, Bank Nifty is expected to have support levels ranging from 47,000 to 46,950 and resistance is seen between 47,800 to 47,850.

Technically, on Nifty 50, Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said that the index ended the day close to its support at 21,500 and the short-term 14-day moving average, accompanied by a bearish engulfing candlestick pattern. This indicates a change in market sentiment. If 21,500 is breached in closing figures, Nifty may move towards the next support level at 21,200. The support of 21500 if held can see recovery towards 21650 which is the immediate hurdle zone.

Stocks To Buy On January 9:

Koothupalakkal has recommended buying in three stocks. They are:

- BUY DATA PATTERNS: CMP At Rs 1978 With Stop Loss Of Rs 1947 For Target Of Rs 2050

- BUY CHALET HOTELS: CMP At Rs 705.70 With Stop Loss Of Rs 692 For Target Of Rs 740

BUY KPR MILLS: CMP At Rs 776.75 With a Stop Loss Of Rs 762 For a Target Of Rs 817

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.