Trade Setup | Things To Know Before Market Opening - 07 Jun 2023 Wednesday

Despite volatile global trends, Sensex and Nifty 50 have held near 62,800 and 18,600 levels. On Wednesday, traders are likely to keep an eye on RBI's monetary policy action where a second consecutive rate pause is expected highly. Among the key mood setters for markets would be the commentary on growth and inflation forecasts by the RBI. Further, investors may react to World Bank's global economic forecast report where it expects India's GDP growth to slow down at 6.3% in FY24 from earlier 6.6%. 

On Tuesday, Sensex ended at 62,792.88, up by 5.41 points or 0.01%. Nifty 50, meanwhile, closed at 18,599 up by 5.15 points or 0.03%. A sharp selling in IT stocks offset gains arising from healthcare, capital goods, auto, and banking stocks. Nevertheless, midcap and smallcap stocks extending their upside to touch yet another new lifetime high.

IT stocks will be in focus after EPAM Systems trimmed the second quarter and full-year outlook for the sector.

Also, traders were surprised when the NSE revised Bank Nifty expiry day to Friday from earlier of Thursday every week. This will come into effect from June 7, 2023. 

Read here: How traders will benefit from Bank Nifty futures & options expiry on Friday every week?

Ameya Ranadive, Equity Research Analyst at Choice Broking said, "Traders and investors need to remain vigilant and monitor the support and resistance levels closely in order to make informed decisions."

The analyst added, Both the Nifty and Bank Nifty displayed a Doji pattern, indicating uncertainty among traders. To maintain the interest of the bulls, it is crucial for the Nifty to hold the levels of 18,400-18,450, while resistance is expected at 18,750-18,800. According to volume profile analysis, there is a strong support zone between 18,400-18,500 for the Nifty Index. For the Bank Nifty, support levels are anticipated at 43,900-43,700, while resistance is placed at 44,400. However, caution should be exercised as the market currently lacks a clear trend.

Further, Ganesh Dongre, Senior Manager - Technical Research at Anand Rathi said the Bank Nifty Spot index will have a support around 43500/43600 but resistance at 44500/44550. While Nifty 50 will have support around 18300/18350 with a resistance between 18700/18750.

Also, Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities said, Nifty is now trading between the 18,470-18,640 range since the last seven trading sessions. A decisive breakout on either side of the range will provide cues about the future direction of the index. The level of 18,500 will continue to act as support for Nifty.

Ramani added, "Bank Nifty has been taking resistance around the 44,250-44,260 zones since the last 4 trading sessions. The downside support of 44,000 level will be the make-or-break level for Bank Nifty."

Moreover, on the technical front on Nifty 50, Riches Vanara, Technical And Derivatives Analyst, stoxbox said, "the index garnered modest buying strength in the zone of 18,530-18,560 and witnessed a sharp technical pullback in the closing 30 minutes bolstering the price action to reclaim the former resistance level of 18,600."

Adani Enterprises: Adani Group has revived its investment plan for Mundra Petrochem Ltd, India’s largest polyvinyl chloride (PVC) plant, with initial funding of ₹14,000-16,000 crore, after a four-month suspension of operations, two people directly aware of the development said.

Tata Consumer Products: Tata Consumer Products is undergoing a transformation to establish itself as a comprehensive fast-moving consumer goods (FMCG) company, chairman N. Chandrasekaran said at the company’s 60th annual general meeting held on Tuesday.

Adani Power/Adani Transmission: Leading bourse National Stock Exchange (NSE) on Tuesday raised the price band of four Adani Group firms, including Adani Power and Adani Transmission. NSE has enhanced the circuit limit of Adani Power to a maximum of 20% from the current limit of 5%. In addition, the exchange has increased the circuit limit of Adani Wilmar, Adani Green Energy and Adani Transmission to 10% from the present 5% level. The changes, which will be effective from Wednesday.

Varun Beverages: As per the regulatory filing, Varun Beverages' board of directors fixed June 15 as the record date to determine eligible shareholders entitled to the 1:2 stock split. The company received approval for the stock split in a postal ballot on June 2, 2023.

Mazagon Dock Shipbuilders: Thyssenkrupp AG’s marine arm and India’s Mazagon Dock Shipbuilders Limited are likely to jointly bid for an estimated $5.2 billion project to build six submarines for the Indian navy, said media reports.

Marksans Pharma: The company has declared a dividend of ₹0.50. The company has set 7 June, 2023 as the record date. The stock will trade ex-dividend on 7 June, 2023.

Optiemus Infracom: The company has declared a dividend of ₹1.5. The company has set 7 June, 2023 as the record date. It will trade ex-dividend on 7 June 2023.

Seshasayee Paper & Board: The company has declared a dividend of ₹0.50. The stock will trade ex-dividend on 7 June, 2023.

Tata Power: The company has declared a dividend of ₹2. The stock will trade ex-dividend on 7 June, 2023.

Uniparts India: The company has declared a dividend of ₹6. The company has set 7 June, 2023 as the record date. It will trade ex-dividend on 7 June 2023

Anuj Gupta, Vice President - Research at IIFL Securities:

- Buy Dabur India with a stop loss of ₹537 for a target price of ₹565.

- Buy Canara Bank with a stop loss of ₹304 for a target price of ₹325.

Ganesh Dongre, Senior Manager - Technical Research at Anand Rathi:

- Buy Kotak Bank at ₹1965 with a stoploss of ₹1935 for a target price of 2020. In the short term, this stock has formed a bullish engulfing pattern on the daily chart. so traders can go long with a stop loss of 1935 for a short-term target of 2020.

- Buy SBI at ₹585 with a stop loss of ₹570 for a target price of ₹600. This stock is still showing strength on the short-term hourly chart pattern, holding the support level of 570 could drag the stock toward the 600 level in the short term, so one can go long with a stop loss of 570 for the target price of 600.

Sumeet Bagadia, Executive Director at Choice Broking:

- Buy Colgate Palmolive at ₹1620 with a stop loss of ₹1590 for a target price of ₹1660

Currently COLPAL is trading around 1620 levels. The stock is continuously taking strong support near 1600 levels which is also 20-day EMA levels. The stock has consolidated since last 4 days. Currently stock is trading above all important moving averages. The minor resistance is witnessed near 1628 levels and once stock crosses the mentioned resistance it can move further towards the target of 1660 and above. Based on the above analysis we recommend buying COLPAL at CMP of 1620 with an SL of 1590 for the target of 1660.

- Dr Reddy's Lab has rebounded after consolidating at a solid support level, coinciding with a positive trend in the Pharma Index. It is currently trading above both the 20-day and 50-day moving averages, indicating positive momentum. The price is also above the middle Bollinger band, and there have been positive crossovers in both the RSI and MACD, suggesting a continuation of the bullish trend in the near future. The high trading volume indicates that short-term traders are interested in buying the stock.

Therefore, based on these technical indicators, one could consider initiating a long position at the current market price of 4610. However, for confirmation of further upward movement, it would be ideal for the stock to close and maintain its position above 4650, potentially leading to a target level of 4730 in the coming days. To manage risk, a stop loss can be set at 4570.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of PickStock. We advise investors to check with certified experts before taking any investment decisions.