Trade Setup Tuesday: Will Sensex, Nifty Continue To See Bull Rush Today? Key Factors For Market Here!

Bulls rush is likely to continue in Sensex and Nifty on Tuesday as the BFSI segment's Q3 earnings report may bolster further buying after the financial results of key IT companies. HDFC Bank's Q3FY24 scheduled later in the day will influence market sentiments. Nifty is expected to rise further to touch 22,150 to 22,300 mark, and from this level onward experts believe consolidation may take place. But the overall sentiment is optimistic. In the previous session, the two Indian benchmarks touched a new lifetime highs with Nifty crossing the 22,000 mark before correcting.

Gift Nifty climbed 0.7% to touch 22,188.5. While Asian shares saw a mixed trend with Japan's Nikkei 225 outperforming with a 1% upside. Australian and Hong Kong shares were in red, and that of South Korea's KOSPI and China's mainboard Shanghai Composite index inched up. The performance comes after China's central bank maintained the status quo in its medium-term policy rate, shrugging off rate cut expectations that dulled investors enthusiasm. The Chinese CSI 300 index nosedived lowest since 2019.

Further, European shares were lower. The STOXX 600 index and Germany's DAX dived by 0.5% each Further, Britain's FTSE 100 shed 0.4%. US market was closed on Monday for for Martin Luther King Day.

On the global front, this week, the focus will be on comments from Federal Reserve's official Christopher Waller who will be speaking on Tuesday. In late November last year, Waller gave a dovish opinion which was one of the key drivers for bulls in the market during the last month of 2023. Additionally, investors will eye key data such as China's economic growth for Q4, UK's inflation, and US retail sales which are all together due on Wednesday.

On Monday, the Sensex ended at 73,327.94, up by 759.49 points or 1.05%, and the of Nifty 50 closed at 22,097.45, higher by 202.90 points or 0.93%. In the trading session, the 30-scrip benchmark touched a fresh historic high of 73,402.16, and Nifty a new lifetime high of 22,115.55.

Ajit Mishra, SVP - of Technical Research, Religare Broking said, "Market started the week on an upbeat note and gained nearly a per cent, in continuation to Friday's move. The IT majors were on the front foot at the opening trade and the move further cascaded to select heavyweights from the banking and energy basket as the day progressed."

Further, Vinod Nair, Head of Research, at Geojit Financial Services said, "The market gained momentum, led by the uptick in the IT index with the growing optimism about increased discretionary spending and strong deal wins. The US bond yield edged lower as market participants bet on the FED easing cycle, which is expected to start in March."

Nair added, "Investors are likely to take a more measured approach due to the release of Chinese GDP and UK inflation data this week."

Day Trade Guide:

Siddhartha Khemka, Head - of Retail Research, Motilal Oswal Financial Services said, "IT sector continued its northbound movement and rallied 6.5% in the last two trading sessions amid better-than-expected Q3 results by heavyweights and underperformance in the past. Q3 earning season had a positive start and is further expected to be propelled by the BFSI segment, where lot many heavyweights are likely to post their results this week. This will support the overall ongoing market momentum and stock-specific action."

In regards to rupee, Rahul Kalantri, VP of Commodities, Mehta Equities added that the local currency is showing continuous strength and maintains below 83.00 amid an increase in the foreign exchange reserves and upbeat growth prospects for the year 2024-25. However, the steady dollar index and rebound in crude oil prices limiting the gains of the rupee.

Kalantri believes the USDINR pair could trade in the range of 82.65- 83.40.

To investors, Mishra said, Nifty may take a breather around 22,150 however the tone is likely to remain positive. He added, "We are closely eyeing the performance of banking majors for cues as others have done their part in the recent surge. A decisive break above 48,400 in the banking index could prompt the index to a newer high. Amid all, we thus suggest continuing with a "buy on dips" approach, with a focus on stock selection."

Technical Outlook Today:

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher expects Nifty to find a support level at 21,950 and resistance at 22,300. While Bank Nifty's support level will be at 47,800 and resistance around 48,600.

Stocks To Buy Today:

Koothupalakkal has recommended buying three stocks on January 16. They are:

- BUY MIDHANI cmp 420.25 Stop Loss 414 Target 442

- BUY INOX WIND cmp 451.65 Stop Loss 444 Target 477

- BUY EIHOTEL cmp 288.95 Stop Loss 284 Target 304

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.