Trade Setup Wednesday: Key Factors To Drive Sentiments In Sensex, Nifty Today; US GDP Numbers In Focus

Indian market is likely to open in green on Wednesday amidst a positive trend in Wall Street after a US Federal Reserve official's comments lifted hope among traders that the central bank's rate hike cycle has probably ended. In the early trade, Gift Nifty traded higher, however, Asian shares traded mixed with Hang Seng, Nikkei 225, and KOSPI index dipped by 0.5-1%. In the previous session, Sensex and Nifty 50 ended bullish.

Siddhartha Khemka, Head - of Retail Research, Motilal Oswal Financial Services said, domestic equities were positive despite mixed global cues after global rating agency S&P raised India's GDP growth forecast for FY24 by 40 bps to 6.4%. Nifty opened higher and sustained its upward move to close with gains of 95 points (+0.5%) at 19890 levels. The majority of the sector ended in green with the action seen in Oil & Gas, Metals, PSU Bank and Auto.

He added, "Oil marketing companies are witnessing renewed interest on account of the fall in oil price ahead of OPEC+ meeting this week. Mining stocks will remain in focus as the Government plans to launch its first tranche auction of 20 blocks of critical and strategic minerals on Wednesday. Even Auto stocks are likely to remain in the limelight amid strong volume sales data for OEM in the month of November due to buoyant festive demand. Further, the momentum is expected to continue with record weddings expected over next one month. Today we will see the release of US Consumer Confidence data while on Wednesday US GDP and China's manufacturing PMI data could be the key trigger for the market."

Nifty has finally broken out the 19,850 level, and a fresh upside is likely to take place ahead. On November 29th, Nifty may find support between 19,600-and 19,800, while resistance could be around 20,00 to 20,600. However, at the lower end, 19,700 could remain a crucial short-term support level.

On Tuesday, Sensex ended higher by 204.16 points or 0.31% to end 66,174.20, while Nifty 50 settled at 19,889.70, up 95 points or 0.48%.

Talking about the performance, Vinod Nair, Head of Research at Geojit Financial Services said, "The gradual return of FIIs in the month of November post the global sell-off during the three months of (Aug to Oct) is having a steady positivity in India. However, currently, the Indian market is facing resistance above to edge above 19,800 levels. Oil prices are stable ahead of the OPEC meeting and OMCs stand to benefit from the ease. Metal sector gained in line with expectations of Chinese stimulus, and PSU banks are doing well due to better peer performance. The market may await state exit polls for further cues, in the short-term."

Further, Prashanth Tapse, Senior VP (Research), Mehta Equities said that after last week's range-bound trend, markets registered gains led by an uptick in power, metal and auto stocks as hopes of strong growth momentum going ahead and receding worries of rate hikes in the US strengthened the mood. FIIs turning net buyers of local equities in the last few sessions too has brought some cheers to the market, even as caution could prevail in the next few sessions ahead of monthly F&O expiry and exit poll results of five state elections later this week. Technically, Nifty could find support in the 19797-19689 range and resistance at 20000-20551.

Technically, on Nifty, Rupak De, Senior Technical analyst at LKP Securities said, the Nifty has risen above the recent consolidation high, indicating increased optimism among market participants. Furthermore, it has held steady above the critical near-term support level of 19,700. The sentiment is expected to stay positive, potentially leading to a new lifetime high in the short term. At the lower end, 19,700 could remain a crucial short-term support level.

Also, on Bank Nifty, Kunal Shah, Senior Technical & Derivative analyst at LKP Securities said, the Bank Nifty index has displayed a positive trend over the last three days, marked by higher highs and higher lows on the daily chart. Currently approaching a critical resistance level at 44000, a successful breakout above this level on a closing basis is anticipated to trigger significant short-covering rallies toward 44300 and 44500 levels. Meanwhile, the lower end finds support at 43600, serving as a cushion for bullish positions, with potential upside targets identified at 44300 and 44500.

To investors, Ajit Mishra, SVP - Technical Research, Religare Broking said, Nifty has finally surpassed the hurdle at 19850 and now we expect the index to inch toward a new high. Needless to say, the quantum of rise would depend upon the performance of the banking, which has also reached closer to its immediate hurdle. Adding he said, "We reiterate our view to continue with the "buy on dips" approach and prefer stocks with relatively higher strength for fresh buying."

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