Trade Setup Tuesday: Q3, FOMC Minutes, Auto Sales Among Key Factors To Drive Sensex, Nifty

Indian market may continue to witness bears on January 2nd due to a lack of driving factors as global cues record dull momentum. In the early trade, Gift Nifty traded flat, while Asian shares traded with little change following a marginal drop on Wall Street. Notably, the Japanese market is closed for trading due to a powerful earthquake that led to tsunami warnings across its region.

Nifty's support levels are expected to be in the range of 21,500 to 21,700 on Tuesday. Investors' immediate focus is likely to be on Q3 earnings season, auto sales, metals production data and FOMC minutes this week.

On January 1st, after trading in the red for the most of the day, Sensex and Nifty made a narrow escape and ended in the green. Sensex closed at 72,271.94, up by 31.68 points or 0.04%. While 21,741.90 finished at 21,741.90, up by 10.50 points or 0.05%. Media, FMCG, IT, oil and gas, healthcare, realty, and PSU bank shares lifted the performance.

Vinod Nair, Head of Research at Geojit Financial Services said, "The market exhibited strength led by optimism on rate cuts, easing global inflation, and softer bond yields. But profit booking was visible at higher levels as lingering concerns over Red Sea disruptions pose short-term risks to global supply chains and freight costs."

Tuesday Trade Guide:

As per Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher, Nifty is expected to find support from 21,600 to 21,550 on January 2nd, while resistance is seen ranging between 21,900 to 21,950. In the case of Bank Nifty, the index's support levels are between 47,900 to 47,850, while resistance is seen from 48,600 to 48,650.

Rupak De, Senior Technical Analyst at LKP Securities also said, "The Bank Nifty has fallen below 20DMA on the hourly chart, suggesting a waning bullishness. The sentiment might remain weak over the short term, however immediate support is placed at 48000, where put writers are present heavily. A decisive fall below 48000 might take the index towards 47700/47500. On the higher end, 48300 is a significant level of resistance and bullish momentum might resume only above that level only."

According to Nair, the spotlight of this week is also on FOMC minutes which will provide an insight for the 2024 rate cut. Momentum in mid & small-caps remains strong, buoyed by a positive macro-outlook however private banks experienced a reversal trend.

Stocks To Buy On January 2nd:

Koothupalakkal has recommended buying in three stocks today. These are:

- BUY REC LTD: CMP At Rs 424.85 With Stop Loss Of Rs 417 For Target Of Rs 440.

- BUY CIE INDIA: CMP At Rs 495.80 With a Stop Loss Of Rs 488 For a Target Of Rs 524.

- BUY CENTURY TEXT: CMP At 1280 With Stop Loss Of Rs 1260 For Target Of 1350.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, nor 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.