Trade Setup For Thursday: Key Factors To Know Before Opening Bell: Day Trade Guide For September 21

The Indian markets are likely to witness a bearish start on Thursday tracking weak global cues after the US Fed hinted at prolonged higher interest rates, while People Bank Of China kept its benchmark lending rates unchanged. In early trade, Gift Nifty traded in red, while Asian cues stumbled amidst the strengthening in the dollar. In the previous session, Sensex and Nifty 50 ended lower due to sharp selling in heavyweights like Reliance Industries and HDFC Bank coupled with expectations of demand resurgence in China and crude supply cuts.

On September 20, Sensex and Nifty nosedived and India's volatility index surged by 3%. Sensex shed 796 points or 1.18% to end at 66,800.84. While Nifty 50 plunged by 231.90 points or 1.15% to settle at 19,901.40. Bank Nifty dipped by 595.25 points or 1.29% to finish at 45,384.60. Stocks like HDFC Bank, Reliance Industries, JSW Steel, Maruti Suzuki and Ultratech Cement were top losers, while Power Grid defied market bears by surging 2.3% followed by marginal upside in Sun Pharma, Asian Paint, ITC and Axis Bank.

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Talking about the markets performance, Ajit Mishra, SVP- of Technical Research Religare Broking said, "Markets traded under pressure and lost over a percent, after the days of steady rise. The tone was negative from the beginning citing a sharp cut in the select heavyweights like HDFC Bank and Reliance which further cascades to others. Consequently, Nifty settled closer to the day's low at 19,897 levels. The decline was widespread wherein metal, financials and banking were badly hit. Meanwhile, the tone was mixed on the broader front as midcap managed to end flat while smallcap lost nearly a percent."

Gift Nifty:

Gift Nifty, formerly known as SGX Nifty, traded at 19,857.5, down by 48 points or 0.24% at around 7.29 a.m. The index opened at 19,905.5 and traded in the range of 19,885.5 and 19,841 respectively.

Day Trading Guide For Today:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects a support level in the range of 19,800/19,750 for Nifty 50 on Thursday, however, resistance is factored around 20,050/20,100. While she sees Bank Nifty as having a support level of 45,000/44,950 with resistance around 45,800/45,850.

To investors, Mishra said, "It is a normal retracement so far and we expect the 19,600-19,750 zone to provide a cushion in case the fall continues. However, the focus should be on risk management citing the possibility of a rise in volatility during this phase. Also, traders may consider adding a few shorts as a hedge to their existing longs."

Nifty Spot Index:

In his technical view, Rupak De, Senior Technical analyst at LKP Securities said, Nifty has dipped below its previous swing high on the daily chart, indicating a decline in bullish sentiment. Following a period of consolidation, the index experienced a correction, which could be considered as an early indication of a bearish reversal.

Additionally, he said, "A negative crossover is evident on the daily RSI. In the short term, it is probable that the Nifty will decrease toward the 19700-19630 range. Selling on rallies might remain a favorable strategy as long as the index remains below the 20000 mark."

Bank Nifty Spot Index:

Kunal Shah, Senior Technical and derivative analyst at LKP Securities said that the index breached the key support level of 46000, which has now turned into a resistance level on the upside. To resume the upward momentum, the index would need to close above this newly established resistance. The immediate downside support for the Bank Nifty stands at 45300. This level is critical, and a break below it is expected to trigger further selling pressure in the direction of the 45000 mark."

Buy Or Sell Stocks In Intraday:

Vaishali Parekh has recommended buying three stocks in the intraday trade on Thursday. These are:

1. Mahindra Finance: The buying range is Rs 309.50 with a stop loss of Rs 303 for a target price of Rs 325.

2. Garden Reach Shipbuilders & Engineers (GRSE): The buying range is at Rs 843.60 with a stop loss of Rs 827 for a target price of Rs 885.

3. JK Tyre: Buying range is at Rs 272 with a stop loss of Rs 266 for a target price of Rs 287.

Stocks In News:

Zydus Lifesciences, Infosys, Apollo Tyres, Cipla, Biocon, SJVN, and EMS among other stocks will be in the news.

Further, stocks like HDFC Bank, Polycab India, Rajratan Global Wire, Safari Industries, Adani Green Energy, Sterling Tools, Lloyds Metals and Energy, Cigniti Technologies, Brigade Enterprises, MTAR Technologies and Phoenix Mills will have investor meetings on September 21.

FII and DII data:

On Wednesday, both foreign institutional investors (FIIs) and domestic institutional investors (DIIs) were net sellers of Indian equities.

FIIs sold stocks worth Rs 3,110.69 crore on September 20, while DIIs pulled out Rs 573.02 crore.

Stocks banned under F&O on NSE:

In the futures & options (F&O) ban list for September 21, NSE retained stocks like Balrampur Chini Mills, BHEL, Chambal Fertilizers & Chemicals, Indiabulls Housing Finance, Indian Energy Exchange, Manappuram Finance, REC and Zee Entertainment Enterprises. However, the exchange excluded the Indian Energy Exchange from the list.

Securities which are banned in the F&O list are those that have crossed 95% of the market-wide position limit.