1 Tata, 1 Mining, 1 Electrical Stock To Buy Before Election Results: Investors Trading Guide This Week

The market is also prepped to know the outcomes of the 2024 election polls on June 4. But before that, market experts are split into opinions of whether volatility or record high performance is likely in Sensex and Nifty. For long-term traders, it is guided to stay invested, while short-term investors are encouraged to find buying opportunities amidst a volatile market. In the early trade of Monday, Gift Nifty skyrocketed to hit a new record high of 23,519, and that hints at a fresh strong buying in the Indian stock market. A key focus will be on foreign investors who have broadly been net sellers this year so far.

Lok Sabha Election 2024 which kick started on April 19, 2024, concluded its last poll on January 1, 2024. The outcomes of the voting will be declared on June 4, and the majority of consensus is a comeback of PM Modi-led government. Also, RBI's June policy outcomes will influence market sentiments.

In May 2024, Sensex surged by 83.16 points or 0.11% to end at 73,961.31, while Nifty 50 climbed by at least 54.85 points or 0.24% to hold 22,530.70 levels.

Monday Trade Guide:

Yashovardhan Khemka, Senior Manager - Research & Analytics at Abans Holdings expects heightened volatility on Monday, which will continue until the final results on June 4th. He suggests that "Investors should remain cautious".

Khemka said, "The exit polls are predicting a clear majority for the incumbent government, which is likely to result in policy certainty and alleviate some recent market concerns."

According to Khemka, on Monday, the markets will be trading with a positive bias.

Adding he said, "However, we are expecting heightened volatility on Monday, which will continue until the final results on June 4th, as the market anticipates the exact number of seats won by the incumbent government. If the BJP alone secures somewhere between 272-290 seats, we may observe short-term profit booking in the market before the rally continues, while a higher-than-projected number of seats will lead to gains."

Stocks To Buy On Monday:

Shiju Koothupalakkal - Technical Analyst at Prabhudas Lilladher has recommended buying 1 Tata Group stock, 1 mining stock, and 1 electrical stock on June 3, 2024. They are:

- BUY MOIL cmp 503.45 Stop Loss 492 Target 527

- BUY TATA POWER cmp 436.75 Stop Loss 428 Target 457

- BUY BHEL cmp 298.90 Stop Loss 293 Target 318

Koothupalakkal expects Nifty to find support at 22400 and resistance at 22800 on Monday, while Bank Nifty is seen to have support and resistance around 48500 and 49600 respectively.

Short-To-Long-Term Traders Guide:

Amid this heightened volatility, Khemka guides long-term investors to remain invested and make substantial investment decisions only after the final results are announced.

Meanwhile, for short-term traders, he suggests finding opportunities due to market fluctuations.

He further said, "Sectors such as infrastructure, defence, capital goods, public sector units (PSUs), and automobiles are expected to experience gains. Investors should remain cautious, as a significant difference between the exit polls and the actual results could impact market direction and sentiment."

Indian Stock Market Weekly Outlook:

Arvinder Singh Nanda, Senior Vice President at Master Capital Services said that the Indian equity market remained in a bullish trajectory so far in the coming week. As we approach close to the election results, the Sensex and Nifty indices are likely to witness heightened volatility. As the overall sentiment of the market is bullish hence any correctional fall may accompanied by fresh buying. Historically, market sentiment ahead of election outcomes tends to be influenced by factors such as political stability, and economic policies of the leading party.

On June 4, the day of the election results, the Sensex and Nifty benchmarks could experience substantial movements, with both high and declines remaining on the cards, as per Nanda.

Currently, the Indian market is trading at a premium, having largely discounted the growing likelihood of the continuation of the Modi era.

Accordingly, Nanda added, "We cannot rule out the possibility of profit booking in the second half of the trading session following an initial upward movement. Historical trends from the previous two election outcomes in 2014 and 2019 have shown similar patterns, where the market closed with minimal change after experiencing significant volatility during the early trading hours."

From a technical perspective, this week, Nanda expects the 22,400 level of Nifty, near the 50-day EMA, to be critical on the downside, while the 23,400 level will be crucial on the higher side.