Trade Setup Tuesday: Sensex, Nifty To See Influence Of Upcoming RBI Policy Meeting; 3 Stocks To Buy

Indian stock market may witness a cautious consolidation stance in the opening bell on April 2nd after its record high performance in the previous one. FY25 saw a banger start due to a strong bullish tone across global cues. However, a slight correction is warranted as Wall Street recorded losses owing to a spike in treasury yield.

At home, the market will also see the influence of RBI's 3-day meeting which will commence from April 3rd onward. Traders are looking for the timeline of rate cuts from global central banks including RBI and the US Federal Reserve at the forefront of the action.

In the previous session, Sensex and Nifty witnessed a strong rally to hit a new lifetime high. The 30-scrip benchmark 363.20 surged by 0.49% to end at 74,014.55 after hitting a new record high of 74,254.62, while the 50-scrip index closed at 22,462 higher by 135.10 points or 0.61% after clocking a new peak of 22,529.95.

Yesterday, Metal and Realty stocks were top gainers. Also, substantial gains were seen in pharma, PSU bank, and financial stocks.

On the previous performance, Vinod Nair, Head of Research, Geojit Financial Services said, "The Indian market boarded on a strong trajectory at the onset of the new financial year, with indications pointing towards a continuation of this favourable momentum, in the near term. This confidence is supported by a global rally in expectation of a Fed rate cut in June and a healthy domestic earnings growth forecast in Q4FY24."

He added, "Notably, metal stocks excelled today, owing to the swift pace of Chinese PMI data, indicating traction in the economic recovery. Going ahead, RBI monetary policy, India PMI data, and US non-farm payroll data will set the direction of the market."

Day Trade Guide:

To investors, Ajit Mishra, SVP - Technical Research, Religare Broking said, "We are now eyeing 22,700 in nifty thus participants should maintain a "buy on dips" approach. We feel the participation of the banking pack would continue to play a critical role in maintaining the prevailing momentum, while others may play a supportive role on a rotational basis. Traders should maintain a stock-specific approach and focus on the stocks which are showing higher relative strength.

Also, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, "Now all eyes will be on RBI monetary policy due this Friday where status quo is expected but commentary would be keenly watched. The market is expected to continue its positive momentum but the journey could be volatile on the back of elections and Q4 earnings this month.

Giving a technical view on Nifty, Kunal Shah, Senior Technical & Derivative Analyst, LKP Securities said, "The Nifty index encountered a sideways trading session following a robust start, encountering resistance at 22500, coinciding with the highest open interest on the call side. To maintain the upward momentum, the index must decisively breach the 22500 mark, paving the way for further gains towards 22700/22800 levels. On the downside, support is situated at 22350, and as long as the index holds above this level, the overall outlook remains optimistic."

Further, on Bank Nifty, Shah added, "The Bank Nifty index displayed upward movement leading up to the crucial RBI policy session this week, surpassing the immediate hurdle at 47500. With lower-end support around the 47000-46800 zone, any retracement towards this level presents a favourable opportunity for long positions. The next obstacle for the BankNifty is at 48000. Post the RBI policy announcement, market direction and sentiment are expected to become clearer."

Meanwhile, Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher expects the Nifty 50 to find support and resistance around the 22,300 and 22,600 levels on April 2nd. Bank Nifty is expected to find support and resistance around 47,200 and 48,000 respectively.

Koothupalakkal also recommended three stocks to buy on Tuesday. They are:

- BUY NFL cmp 94.60 Stop Loss 92 Target 100

- BUY NMDC cmp 212.60 Stop Loss 208 Target 222

- BUY GRSE cmp 807.40 Stop Loss 790 Target 850

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.