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Trade Setup | Things To Know Before Market Opening - 24 Jan 2024 Wednesday



Stock market today: Following an eventful weekend, the Indian stock market had an enthusiastic opening on Tuesday, but as the day unfolded, it came under sell-off pressure and witnessed a bearish reversal. The Nifty 50 index finished 1.54% lower at the 21,238 level, the BSE Sensex crashed 1,053 points and closed at the 70,370 mark whereas the Bank Nifty index tanked 1,043 points and ended at the 45,015 level. 

Pharma was the only sector which gained 1.7%. Rest all sectors witnessing selling pressure with media being the biggest loser of 13% on the back of the Zee-Sony deal being called off. Nifty Realty too fell 5.3% following weak results from Oberoi Realty. PSU Banks, Railways, and Power Utilities were some of the sectors that saw profit booking after witnessing sharp run-up in the recent past. In the broad market, the small-cap index crashed 2.79% whereas the mid-cap index tanked to the tune of 2.95%.

"Global sentiments turned cautious after Fitch Group's statement that South Asian economies would be most affected, amid rising hostilities in the Red Sea due to Houthi attacks and India’s economic forecast faces a significant risk on account of a prolonged spell of disruptions. Further BoJ followed China and kept interest rates unchanged," said Siddhartha Khemka, Head - Retail Research at Motilal Oswal.

On the outlook for the Nifty 50 today, Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities said, "The short-term trend of Nifty is down and one may expect more weakness in the short term. The next important support zone to be watched is around 20,950 to 20,850 levels, which coincides with supports of the previous up gap of 14th December, the swing low of 21st December, and also 38.2% Fibonacci retracement of October 23 bottom to January 24 top. Immediate resistance for Nifty today is at 21,400 levels."

Also Read: Indian stock market: 6 key things that changed for market overnight

On the outlook for Bank Nifty today, Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher said, "Bank Nifty plunged heavily on the back of extended losses witnessed in HDFC Bank, Axis, and Kotak Bank to breach below the important 100 period MA with the trend turning weak further. The index would have the next significant zone of 46,600 levels of the 200 period MA which if breached would turn bearish with the next major support at 43,600 levels."

On Nifty Call Put Option Data, Chinmay Barve, Head of Technical and Derivative Research at Profitmart Securities said, “Major total Call open interest was seen at 21500 and 21600 strikes with total open interest of 166791 and 146040 contracts respectively. One of the major Call open interest additions was seen at 21300 strike which added 94775 contracts in open interest," adding, "Major total Put open interests was seen at 21200 and 21000 strikes with total open interest of 111239 and 150510 contracts respectively. One of the major Put open interest addition was seen at the 21200 strikes which added 50143 contracts in open interest while the 21500 strike saw a reduction of 65631 contracts in open interest."

On Bank Nifty Call Put Option Data, Barve further added, “Major total Call open interest was seen at 45000 and 45500 strikes with total open interest of 153593 and 150215 contracts respectively in open interest. One of the major Call open interest additions was seen at 45000 strike which added 138888 contracts in open interest," adding, "Major total Put open interest was seen at 45000 and 44500 strikes with total open interest of 150679 and 159817 contracts respectively. One of the major Put open interest additions was seen at 44900 and 44000 strikes which added 38618 and 88735 contracts respectively in open interest."

On buy or sell stocks for today, stock market experts — Sumeet Bagadia, Executive Director at Choice Broking; Ganesh Dongre, Senior Manager — Technical Research at Anand Rathi; Kunal Kamble, Senior Technical Analyst at Bonanza Portfolio and Shiju Koothupalakkal, Technical Analyst at Prabhudas Lilladher — recommended eight stocks to buy or sell today.

1] Bajaj Auto: Buy at 7095.90, target 7420, stop loss 6930.

Bajaj Auto share presents a compelling technical picture. Notably, it holds a robust support level at 6930, signifying historical strength and the potential to attract buyers. Additionally, its proximity to the 20 Day Exponential Moving Average (EMA) is an encouraging sign, indicating short-term bullish sentiment. The daily chart reveals the formation of a robust bullish pattern, suggesting an uptrend in the making. The Relative Strength Index (RSI) comfortably trading near 62.52 further supports the case for strength, as it indicates that the stock is not overbought, leaving room for potential gains.

2] Zydus Lifesciences: Buy at 729, target 770, stop loss 710.

Zydus Lifesciences share is presently trading at 729.15, having undergone a brief phase of minor declines followed by sideways consolidation. Notably, the stock has found support at the 20-day Exponential Moving Average (EMA), signaling a potential for further upward movement, with a target set at 770. Importantly, a substantial support level is identified near 710 on the downside.

3] SBI: Buy at 605, target 625, stop loss 596.

In the short-term trend, SBI share price has a bullish reversal pattern, technically retrenchment could be possible till 625. So, holding the support level of 596 this stock can bounce toward the 625 level in the short term. Hence, the trader can go long with a stop loss of 596 for the target price of 625.

4] BEL: Buy at 187, target 194, stop loss 182.

In the short-term trend, BEL share price has a bullish reversal pattern, technically retrenchment could be possible till 194. So, holding the support level of 182 this stock can bounce toward the 194 level in the short term. Hence, the trader can go long with a stop loss of 182 for the target price of 194.

5] ELGI Equipments: Buy at 557, target 590, stop loss 550.

The stock after the consolidation phase has witnessed a decent spurt with a bullish candle pattern on the daily chart to indicate a breakout with significant volume participation to improve the bias and further rise can be anticipated. With the RSI also getting better and signaling a buy, we suggest buying this stock for an upside target of 590 keeping the stop loss of 550 level.

6] Chalet Hotels: Buy at 752, target 782, stop loss 742.

The stock has witnessed a steady rise in recent times indicating a higher low and taking support near the 715 level has indicated a decent positive candle to improve the bias to expect further upward move in the coming sessions. With the chart looking good and the RSI also once again showing signs of improvement, we expect the stock to gain further for the next near-term target of 782 levels keeping the stop loss of 742.

7] LIC: Sell at 877.25 to 875.25, target 833, stop loss 906.

LIC share price on a Daily time frame has formed a Bearish Engulfing pattern. A bearish engulfing pattern is a Short-term reversal pattern that indicates a pause in an uptrend. Today's close has engulfed a 4-day close which is indicating profit booking in the security. The divergence in RSI also indicates a short-term reversal. Volume during the rise depreciating indicating that the buyers are losing interest. Hence based on the above setup a short-term negative position can be made in LIC shares.

8] HCL Tech Future: Sell at 1525 to 1523, target 1440, stop loss 1587.

On a daily time, frame HCL Tech's future at resistance has formed a bearish engulfing pattern which is followed by a negative candle closing below the previous low indicating a short-term downward move. The Increase in volume in resistance is supporting g the price action which indicates sellers are interested in selling the future at the current market price. The divergence in RSI indicates a pause in the uptrend, which supports the short-term downward move. Hence based on the above technical setup a negative position can be made in HCL TECH Future.

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 making any investment decisions.