Trading Guide On Saturday: Nifty Seen In 21,700-21850 Hurdle; NMDC, Jindal Stainless Among Top Picks To Buy

Indian stock market will be open for a regular trading session on Saturday, January 20, instead of Monday, January 22 due to the celebration of Ram Mandir's inauguration in Ayodhya. In the one-of-a-kind trading session, Nifty is expected to hold between 21,700 to 21,850 hurdle, while its support level is predicted between 21,200 and 21,500. In the previous session, Sensex and Nifty halted their three-consecutive day selloff to rise by nearly 1% each driven by broad-based buying.

As per the last update, as of January 20, 2.30 am, Gift Nifty was up by nearly 0.7%. Also, in the previous session, Asian shares gained on the backdrop of an AI-fuelled outlook by TSMC that propelled buying in tech stocks. However, the weekly performance of Asian cues is broadly in red due to weakness in China and the foggy outlook of rate cuts ahead in 2024.

Meanwhile, US stocks gained with the S&P 500 index closing at an all-time high on Friday with a 1.23% upside. While the Dow Jones Industrial Average and tech-heavy giant Nasdaq Composite advanced by 1.05% and 1.70%.

At home, Sensex ended at 71,683.23, up by 496.37 points or 0.70%, while Nifty 50 ended at 21,622.40 up by 160.15 points or 0.75%. Auto, financials, FMCG, metal, PSU banks, and oil & gas stocks were top gainers.

Prashanth Tapse, Senior VP (Research), Mehta Equities said, "Markets rebounded from its 3-day losing streak on renewed all-round buying support, aided by recovery in global indices. The recent fall was extremely fast-paced and concerns of higher valuations along with global factors prompted investors to book profit.

Day Trade Guide Today:

Tapse said India's strong growth prospects in the long term will always provide a cushion to the falling markets. Technically, for Nifty the confirmation of strength is only above the 21807 mark, while support is placed at 21500-21285 levels.

Also, Ajit Mishra, SVP - Technical Research, Religare Broking added, that Nifty has reclaimed its short-term moving average but lacks decisiveness. We reiterate our cautious view citing the prevailing underperformance of the banking and eyeing the 21,700-21,850 zone to act as a hurdle. Traders should continue a stock-specific approach and prefer hedged trades.

Meanwhile, Vinod Nair, Head of Research, Geojit Financial Services, as FIIs persist with risk-off sparked by the likelihood that interest rates may not moderate and domestic earnings growth can slow down as per the initial Q3 results announced. Sector rotation is likely to propel going ahead."

Further, Siddhartha Khemka, Head - of Retail Research, Motilal Oswal Financial Services said, investors will track the results of key index heavyweights like Reliance, HUL, ICICI Bank, and Kotak Bank which will be released over the weekend. In a truncated week, the market will take cues from global factors including Bank of Japan and European Central Bank meetings and economic data from the US, China, and Japan. Next week the result season will pick up pace with a host of key large and mid-cap companies releasing their numbers. Overall we expect domestic equities to trade in a broader range with positive bias.

Technical Outlook:

Shiju Koothupalakkal, Technical Analyst at Prabhudas Lilladher expects Nifty to find support at 21,500 and resistance at 21,750, while Bank Nifty is expected to have support at 45,400 and resistance at 46,000 on January 20.

On Nifty, Rupak De, Senior Technical Analyst, LKP Securities said, "The Nifty remained sideward throughout the session following a strong start. The index has moved back above the critical near-term moving average. In the short term, the index is likely to consolidate within the bands of 21500 and 21700. A decisive breakout on either side would confirm a directional move."

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said, "The Bank Nifty is currently witnessing a bearish trend, with bears exerting dominance from higher levels. The index encounters strong resistance around the 46300 mark, posing a significant hurdle for any upward movement. Active put writing indicates lower-end support at 45500; however, breaching this level may intensify selling pressure. Additionally, the index is trading below short-term moving averages, signalling a bearish sentiment in the current market scenario."

Stocks To Buy Today:

Koothupalakkal recommended three stocks to buy. They are:

- BUY MAH & MAH cmp 1655 Stop Loss 1630 Target 1720
- BUY JSL cmp 582.65 Stop Loss 572 Target 607
- BUY NMDC cmp 210.85 Stop Loss 206 Target 222

On Friday, NSE in its circular said that members are requested to note that the Exchange shall be conducting regular trading sessions on Saturday, January 20, 2024 from the primary site in the Equity and Equity Derivatives segments as per regular market timings. Price bands applicable for Normal trading days shall continue to remain applicable on January 20, 2024.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, 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.