Trade Setup | Things To Know Before Market Opening - 13 Sep 2023 Wednesday

Day trading guide for today: Domestic equity benchmarks Sensex and Nifty settled lower in the previous session, exhibiting significant volatility with the mid and smallcap spaces witnessing a strong wave of selloffs. Investors booked profits after the blue-chip index hit a record high near the open, while the small-caps and mid-caps snapped an 11-session winning run.

Sensex closed at 67,221.13, up 94 points, or 0.14 per cent while the Nifty closed the day at 19,993.20, down 3 points, or 0.02 per cent. During the day, Nifty climbed 114 points or 0.57 per cent to hit its all-time high of 20,110.35.

Mid and small-caps suffered deep falls. The BSE Midcap index fell 2.96 per cent to 32,084.93 while the BSE Smallcap index plunged 4.02 per cent to 36,982.74. In early trade today, the midcap and smallcap indices hit their fresh record highs of 33,245.85 and 38,769.33 respectively.

Also, the small- and mid-caps have gained 9.4 per cent and 7.7 per cent, respectively, over the last 11 sessions, and have posted numerous record highs along the way. While heavyweights TCS and Larsen & Toubro emerged as the top gainers, NTPC and Power Grid were the major drags.

On the macroeconomic front, government data showed after market hours that India's retail inflation eased to 6.83 per cent in August from a 15 month high peak in July on a fall in food prices.

However, the consumer price index (CPI) inflation still remains above the Reserve Bank of India's upper tolerance limit of 6 per cent. Separate data showed that the industrial output surged 5.7 per cent in July, up from 3.7 per cent in June 2023.
 

On the outlook for Nifty, Ajit Mishra, SVP - Technical Research, Religare Broking expects consolidation in the index after the recent surge and suggest preferring index majors over the midcap and smallcap citing the possibility of further profit taking in the broader indices. ‘’Apart from the domestic factors, traders should keep a close watch on the US markets for cues,'' said Mishra.

Rupak De, Senior Technical Analyst at LKP Securities adds, ‘’Nifty witnessed a correction as sellers exerted pressure around the 20,100 level. However, the correction was contained, thanks to put writers at 19,900 who helped shield the market from further declines. 

‘’In the short term, the headline index Nifty is expected to maintain its strength as long as it stays above the critical short-term support level of 19,780. On the higher end, a decisive move above 20,100-20,150 could propel Nifty toward 20,500 in the short term,'' said De.

On the outlook for Bank Nifty, Kunal Shah, Senior Technical & Derivative analyst at LKP Securities observes that after a remarkable upward movement over the past week, the market experienced selling pressure from higher levels. 

‘’Call writers have significantly increased open interest at the 46,000CE strike, which is now acting as a strong resistance level. On the downside, key support is seen at 45,200, and if it manages to hold this support, we could witness some recovery towards 45,600 or 45,800 levels,'' said Shah.
 

Wall Street stocks ended lower on Tuesday as Oracle shares tumbled more than 13 per cent after a weak forecast and surging oil prices deepened worries about persistent price pressures ahead of crucial inflation readings this week. 

Oil prices rose about 1 per cent, with Brent crude touching $92 per barrel boosted by a tighter supply outlook, after oil producers Saudi Arabia and Russia extended their voluntary oil supply cuts till the end of the year.

Investors await US inflation data due Wednesday and monetary policy meetings of the European Central Bank (ECB) on Thursday, along with the US Federal Reserve meeting outcome due next week.

Shares of tech giant Apple dropped 1.8 per cent after unveiling new iPhones, while not increasing prices as it faces a global smartphone slump. The stock was also hurt by a report that China's Huawei Technologies has raised the second-half shipment target for its Mate 60 series smartphone by 20 per cent.

F&O Ban List

Chambal Fertilisers, BHEL, Indiabulls Housing Finance are the 10 stocks that are a part of the F&O ban list by the stock exchange for Wednesday.

The securities have been put on ban under the F&O segment as they have crossed 95 per cent of the market-wide position limit (MWPL), according to the NSE. However, the stocks will be available for trading in the cash market.

On intraday stocks for today, stock market experts — Sumeet Bagadia, Executive Director at Choice Broking, Mitesh Karwa, Research Analyst at Bonanza Portfolio Ltd, Ganesh Dongre, Senior Manager - Technical Research at Anand Rathi— recommended six stocks to buy today.
 

1.Infosys: Buy Infosys at ₹1,501 with a stoploss of ₹1,470 at a target price of ₹1,545

The stock of Infosys Limited is currently trading at 501, having found a firm support zone between 1,485-1,460 levels, from which it has recently rebounded. This price action is indicative of a potential bullish sentiment in the stock. Furthermore, the Relative Strength Index (RSI) stands at 73, demonstrating an upward trend trajectory.

An encouraging sign for traders and investors is the impending breakout and sustaining above the 1485 level, which could catalyze a substantial upward movement in Infoys shares. Against this backdrop, a prudent trading strategy may involve initiating a buy position at the current market price of 1,501, while maintaining a stop loss at 1,470 to mitigate potential downside risks. With these factors aligning, the envisaged price target of 1,545 emerges as a plausible objective.

2.ITC: Buy ITC at ₹451 with a stoploss of ₹440 at a target price of ₹470

ITC is currently trading at 451. After a prolonged correction, the stock seems to be following a pattern of forming higher highs and higher lows, accompanied by good trading volume. These trends suggest a bullish trajectory is likely to persist. On the one-hour chart, the stock has formed a rounding bottom pattern breakout. The immediate resistance levels to watch are between 460 and 470, while there is a supportive range between 440 and 445.

The Relative Strength Index (RSI) for ITC currently stands at 53, indicating that there is still potential for further upward movement. Taking into account the technical indicators and prevailing market conditions, it appears to be an opportune moment to consider purchasing ITC at its current market price (CMP) of 451. The target for this trade would be 470, and it is advisable to set a stop loss at 440 to manage risk effectively.
 

3.Sun Pharmaceuticals: Buy Sun Pharma at ₹1,145 with a stoploss of ₹1,135 at a target price of ₹1,160

In the short-term trend, the stock has a bullish reversal pattern, technically retrenchment could be possible till 1,160 so, holding the support level of 1,135 this stock can bounce toward the 1160 level in the short term, so the trader can go long with a stop loss of 1135 for the target price of 1160.

4.Maruti Suzuki: Buy Maruti Suzuki Buy at ₹10,485 with a stop loss at ₹10,150 at a target price of ₹10,750

On the short-term chart, the stock has shown a bullish reversal pattern, so holding the support level of 10,150. this stock can bounce toward the 10,750 level in the short term, so the trader can go long with a stop loss of 10,150 for the target price of 10,750.
 

5.Indoco: Buy Indoco in range of ₹337- ₹340 with a stoploss of ₹328 at a target price of ₹360

Indoco is seen to be bouncing from an important support zone on the daily timeframe and making a bullish candlestick which is why a buy is recommend on is initiated for targets upto Rs.360. One can initiate buy on dip in the range of 337-340 with stoploss below 328 on daily closing basis.

6.Starcement: Buy Starcement in range of ₹156- ₹159 with a stoploss of ₹151 at a target price of ₹171

Starcement is seen to be taking support from an important support zone on the daily timeframe which shows bullish strength which is buying can be done in STARCEMENT for targets upto Rs. 171. One can initiate a buy trade in between the range of 156-159 with stoploss of 151 on daily closing basis.

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.