Trade Setup For Wednesday: TCS Earnings, Geopolitical RIsks Key Factors To Know Before Market Opens

Amidst the ongoing war between Israel and Hamas, experts believe this geopolitical tension is like to have a major impact on the world economy, which led to a rebound in global markets. Indian equities also made strong gains with the Sensex crossing the 66,000 mark and Nifty 50 nearing 19,700 levels in the previous sessions. On Wednesday, trends in the US dollar, treasury yields and crude oil prices will be keenly watched as investors bet for dovish Fed remarks ahead. At home, the September quarter earnings of tech giant TCS will be among the key triggers to influence the domestic market's mood.

During the today's session, Nifty's biggest hurdles are seen to be between 19,800 to 19,900, while support is seen around 19,470 levels.

In the early trade, Gift Nifty traded marginally up by 16.5 points or 0.08% to 19,792.5. The benchmark opened at 19,776 and ranged between 19,800 to 19,777.

Further, Asian stocks surged in the early deals of Wednesday's session, as they shrugged off concerns related to China's property sector after developer Country Garden Holdings Co. signalled for its first-ever default and hired advisers. It would be mostly a rally in US markets and hopes of a meaningful Chinese stimulus anytime soon that has lifted investors' spirits.

Japan's Nikkei 225, Australia's ASX 200 and China's mainboard SSE Composite Index were up over 0.5% each, while Hong Kong's Hang Seng zoomed 1.6%. But South Korea's KOSPI index outperformed with over 2% gains.

Overnight, Wall Street soared after US Fed officials indicated to end of the rate hike cycle, which came as good news for investors alongside gauging the developments in the Israel-Hamas conflict and the US' aiding the Jews country in the Middle East. The Dow Jones Industrial Average gained 135 points, while the S&P 500 was up 0.5% and the tech-heavy Nasdaq Composite index advanced by at least 0.6%.

On Tuesday, Sensex ended at 66,079.36, up by 566.97 points or 0.87%, while Nifty rallied by 177.50 points or 0.91% to settle at 19,689.85. Bank Nifty gained by 474 points to end at 44,360.15. Except for healthcare, all other sectoral indices held a bullish tone with PSU banks, metal, private banks, media, and financial stocks witnessing strong upside.

On yesterday's performance, Vinod Nair, Head of Research at Geojit Financial Services said, "The Indian market completely recovered yesterday's losses which was mainly due to the Hamas-Israel conflict. Moderation in crude prices and positive global cues on account of dovish remarks from Fed officials, which restrained US bond yields, aided the rebound. The domestic market's primary focus is currently on the approaching result season, with optimistic expectations on earnings."

The only spoilsport for the Indian market which has continued throughout the month would be foreign funds outflow and Tuesday was no different. The Foreign institutional investors (FIIs) sold Rs 1,005.49 crore in Indian stocks, although, domestic institutional investors (DII) offset the impact of outflow from FIIs by becoming major net buyers with an inflow of Rs 1,963.34 crore.

Here is the Trade Setup for Wednesday Of Indian Market:

Day Trading Guide For October 11th:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects a support level in the range of 19,550/19,500 for Nifty 50 on Wednesday, however, resistance is factored around 19,800/19,850. While she sees Bank Nifty as having a support level of 44,000/43,950 with resistance around 44,800/44,850.

Meanwhile, Prashanth Tapse, Senior VP (Research), Mehta Equities said, " Technically, Nifty's biggest hurdles for Wednesday's trading session is seen at the 19877 mark, while on the downside, the biggest support is seen at 19471 mark."

Also, for today, Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, "The Q2 earnings season would start with TCS declaring its numbers. We expect robust 21% earnings growth for Nifty in Q2, which would be driven by domestic cyclicals (BFSI & Auto). So lot of stock-specific action would be seen over next 45 days as the earnings get declared. On the index front, Nifty might continue with its consolidation with bouts of volatility as it would track the geo-political development, US bond yields and oil prices amidst result announcements."

As for the Israel-Hamas conflict, Shrikant Chouhan, Head of Research (Retail), at Kotak Securities said, that although the ongoing war between Israel and Hamas has already seen many casualties, investors, however, feel that it may not have a cascading effect on the world economy and the focus would again shift to global macro-economic concerns. While oil prices may stay volatile, crude prices are unlikely to remain high for long due to sluggish demand from key economies.

To investors, Ajit Mishra, SVP - Technical Research, Religare Broking said, "Nifty has finally crossed the immediate hurdle of short-term moving average (20 EMA) and we expect Nifty to test 19,800. However, the sustainability of the move would depend upon the performance of the heavyweights, especially from the banking and IT pack. Meanwhile, mixed global cues could keep the volatility high. Amid all, traders should avoid aggressive trades and prefer a hedged approach."

Intraday Stocks Picks:

Parekh recommended buying three stocks during Wednesday's trade. These are:

1. Bharat Forge: Buy at Rs 1,109 with a stop loss of Rs 1,092 for a target price of Rs 1,170.

2. MOIL: Buy at Rs 218 with a stop loss of Rs 214 for a target price of Rs 230.

3. National Aluminium: Buy at Rs 97 with a stop loss of Rs 95 for a target price of Rs 104.

Nifty Spot Index Level:

Rupak De, Senior Technical analyst at LKP Securities said, that Nifty remained robust throughout the day as the bulls regained control. On the hourly chart, the Nifty has broken out of an inverted head and shoulders pattern. In the short term, the index is expected to maintain its strength. A decisive move above 19,700 points could potentially propel the index towards the range of 19,850 to 19,900. The support level is situated at 19,600.

Bank Nifty Index Support Level Today:

Kunal Shah, Senior Technical and derivative analyst at LKP Securities said, the bulls made a strong comeback, defending the support zone of 44000-43800, where fresh put writing is evident. The next immediate hurdle is positioned at 44500, and a break above this level is expected to trigger further short covering, potentially pushing the index towards the 45000 mark. Additionally, the momentum indicator RSI has provided a positive crossover, confirming a buy signal.

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.