Trade Setup Monday: Key Factors To Know Before Opening Bell; Day Trade Guide For Today

After halting three-consecutive weekly gains, the trading week from September 25th to 29th will be influenced by global trends, F&O expiry, foreign funds flow and stock-specific movements. Last week, Sensex and Nifty dropped by over 2.5% each, owing to mixed cues from the US and Asian markets. However, PSU banks have shown robust growth. On Monday, banks, NBFCs and public sector stocks will be in focus after JP Morgan decided to include Indian government securities in its emerging market bond index. Further, macroeconomic data both at home and globally, coupled with dollar movement against basket of currencies, rupee price, oil prices and bond yields will play a role in defining the Monday's trend.

Last week, on Friday, the Sensex ended at 66,009.15, down by 221.09 points or 0.33%. While Nifty 50 tumbled by 68.10 points or 0.34% to settle at 19,674.25. In this holiday-shortened week, Sensex declined by 1,829.48 points or 2.69% and Nifty 50 plunged by 518.1 points or 2.56%. Markets were dragged by heavyweights like HDFC Bank and Reliance along with sectoral indices like Realty, Metal and Banks.

Day Trading Guide For Today:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects a support level in the range of 19,100/19,200 for Nifty 50 on Monday, however, resistance is factored around 20,000/20,100. While she sees Bank Nifty as having a support level of 44,200/44,000 with resistance around 45,000/45,200.

To investors, Ajit Mishra, SVP - Technical Research, Religare Broking said, "Feeble global cues combined with pressure on select heavyweights are weighing on the sentiment. Going ahead, recovery in the banking and financial majors would be critical for any meaningful rebound else the corrective tone would continue. We feel it is prudent to restrict aggressive positions until the market stabilizes."

Nifty Spot Index Support Level Today:

Rupak De, Senior Technical analyst at LKP Securities said, Nifty experienced consistent selling pressure throughout the week, resulting in a decline of 2.80% from its all-time high. This recent correction has caused it to dip below the critical 21-day Exponential Moving Average (21EMA). The sentiment appears bearish at this point, with a key support level identified at 19,600. A breach below 19,600 could potentially initiate a more significant market correction. On the upside, 19,800 is expected to serve as a resistance level.

Bank Nifty Index Support Level Today:

Kunal Shah, Senior Technical & Derivative analyst at LKP Securities said, the BankNifty index witnessed a significant double top breakdown pattern, which often signals a reversal in trend. This bearish pattern was largely influenced by selling pressure in HDFC Bank.The index breached its 20-day moving average (20DMA) located at 45,000. A break above this level could trigger some short-covering, but the overall sentiment remains bearish.The prevailing sentiment in the BankNifty index remains bearish. As a result, it's advisable to maintain a "sell on rise" approach. The next immediate support is seen in the 44,500-44,400 range.

Intraday Stocks Picks:

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

1. Lemon Tree: Buy at Rs 115.35 with a stop loss of Rs 108 for a target price of Rs 132.

2. Bombay Dyeing: Buy at Rs 146.85 with a stop loss of Rs 137 for a target price of Rs 168.

3. IRCON: Buy at Rs 141.45 with a stop loss of Rs 129 for a target price of Rs 165.

Stocks In News:

Stocks like SBI, JSW Steel, Shree Renuka Sugars, Vaibhav Global, Suzlon Energy, Reliance Industries, and Delta Corp will be in focus.

Companies like Adani Green Energy, Biocon, Nuvoco Vistas Corporation, and Kalyan Jewellers India will be holding their investors meet.

Additionally, Newjaisa Technologies and JSW Infrastructure will launch their initial public offering (IPOs).

FIIs and DII data:

On September 22nd, foreign institutional investors (FIIs) and domestic institutional investors showed mixed trend.

In Indian stocks, FIIs sold Rs 1,326.74 crore worth shares, while DIIs made buying of Rs 801.27 crore.

As of September 22, 2023, foreign portfolio investors are broadly net sellers with an outflow of Rs 10,164 crore in Indian equities in the current month.

F&O Ban List:

In the futures & options (F&O) ban list for September 25, NSE added stocks like Canara Bank, and Granules India to the list. However, it retained stocks like Delta Corp, Hindustan Copper, Indiabulls Housing Finance and Manappuram Finance. Meanwhile, the exchange excluded the Balrampur Chini Mills, BHEL, Punjab National Bank and Zee Entertainment Enterprises from the list.

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

Global Trends:

Hawkish remarks of US Federal Reserve, spike in treasury yields, and possibility of government shutdown led the bandwagon of bears in US stocks. Last week, on Friday, the Dow Jones Industrial Average ended down by 106.6 points, while S&P 500 and tech-heavy Nasdaq Composite index dipped as well. Notably, Wall Street has shed over 6% from their late July highs, with past-week being extremely volatile.

According to Arvinder Singh Nanda, Senior Vice President, of Master Capital Services, on the global front, US Fed Reserve kept the interest rate unchanged despite US weekly jobless claims falls to 8-month low at 201,000, reflecting relative strength in the labour market.

He added, global and domestic macroeconomic data, trend in global stock market, crude oil prices, global cues, movement of rupee against dollar, Investment by FIIs and DIIs will be in focus. Market will take further cues from some key events such as US Building permits, New Home Sales, API Weekly crude oil, crude oil inventories, jobless claims, US GDP data, UK GDP, Eurozone inflation, India foreign reserves, fiscal deficit.