Day Trading Guide For Monday: 2 Stock Picks By Sumeet Bagadia of Choice Broking For 9th October

On Friday, the Nifty rose by 106 points to reach 19,651 after the RBI Monetary Policy Committee (MPC) held the repo rate at 6.5 per cent following its meeting on October 6, while the Sensex climbed by 364 points to reach 65,996. The midcap index witnessed a rise of 239 points, hitting 40,285, and the Nifty Bank gained 159 points to reach 44,373.

The commencement of company results for the second quarter of the current fiscal year (Q2 FY24), which runs from July to September, will be the focus of attention in the domestic market. On the international front, however, data like the US inflation rate for September on October 12, 2023, and the US preliminary UoM consumer sentiment on October 13, 2023, will influence market sentiment next week.

Nifty Outlook Next Week

Jatin Gedia - Technical Research Analyst at Sharekhan by BNP Paribas said, "The Nifty opened gap up for the second consecutive day and traded with a positive bias throughout the day to close with gains of ~107 points. On the daily charts, we can observe that the Nifty has managed to close above the 40-day moving average (19610) which is a Bullish sign. On the weekly charts we can observe that the Nifty has closed in the green and in terms of pattern it has formed a Dragonfly Doji which has bullish implications. We expect this pullback to continue till 19778 - 19800 where resistance in the form of the 50% Fibonacci retracement level and the 20-day moving average is placed. In the case of a dip towards 19530 - 19580, it should be used as a buying opportunity."

"Nifty is bouncing back from the 19,333 level after a significant dip. The real challenge is surpassing the 20-day moving average (20-DMA) at 19,800, which also coincides with a high open interest area. Breaking through this level at 19,800 would signal the end of the correction, and Nifty might then aim for the 20,000-20,200 range. On the other hand, there's a critical support zone between 19,300 and 19,250. If Nifty falls below this range, it could continue to drop towards 19,000 and 18,800. So, it's important to keep a close eye on the range between 19,300 and 19,800, as it defines where Nifty is currently trading," said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.

Bank Nifty Outlook Next Week

"Bank Nifty opened gap up and thereafter consolidated for the most part of the day. On the hourly momentum indicator, we can observe positive divergence and crossover which is a bullish sign. We expect the Bank Nifty to provide a pullback till 44800 - 45000 from short-term perspective. In case of a dip it should be used as a buying opportunity." said Jatin Gedia.

"Bank Nifty is currently looking for support in the range of 44,000 to 43,700 points. On the other hand, a significant resistance zone exists between 44,800 and 45,000 points, characterized by the presence of both the 20-day and 50-day moving averages (20-DMA and 50-DMA). If Bank Nifty manages to break above 45,000 points, it could trigger short-covering and potentially lead to a rally towards the 45,400 to 45,600 point range. However, if it fails to surpass this resistance, there is an increased risk of renewed selling pressure. In case the index drops below the 43,700 point mark, the next support area can be found between 43,300 and 43,000 points," said Pravesh Gour.

Market Outlook Next Week

According to Pravesh Gour, all eyes will be on the beginning of corporate performance for the second quarter of the current fiscal year (Q2 FY24), spanning from July to September. The anticipation is particularly high as India's largest software services company, TCS, is slated to unveil its Q2 results on October 11, 2023, with HCLTECH and INFOSYS following suit on October 12, 2023. Market participants will be keeping an eye on the movement of the rupee against the dollar and crude oil prices. Investments by foreign institutional investors (FIIs) and domestic institutional investors (DIIs) will also be monitored.

"On the macroeconomic front, there are important data releases scheduled. On October 12, 2023, we anticipate the release of industrial production and manufacturing production data for August. Simultaneously, the inflation rate for September will be announced, providing insights into the country's economic health. Lastly, the wholesale price index (WPI) data for September is slated for release on October 13, 2023. All of these factors collectively contribute to the broader understanding of India's economic landscape during this period," said Pravesh Gour.

Stocks To Buy Next Week

Below are the 2 stock picks by buy rating by Sumeet Bagadia, Executive Director at Choice Broking for the Monday trading session, 9th October.

IndusInd Bank

Buy INDUSINDBK in cash @ Rs 1434.80, stop-loss @ Rs 1395, target: Rs 1505

The INDUSINDBK has bounced from the strong support of 1395 which is also close to the level of 50 Day EMA. The stock is currently trading at 1434.80, which is also above its 20 20-day exponential moving average (EMA). The stock has demonstrated strength as evidenced by the ongoing volumes and upward movement of the stock. The RSI indicator is also comfortably trading at 52 levels, which will support the upward movement of the stock. The stock has a smaller resistance level around 1447, which is also the recent top. Once stock surpasses the above-mentioned level the stock can move towards 1505 levels and above.

We recommend buying INDUSINDBK at a CMP of 1434.80 with a medium-term target price of 1505. Our analysis will be deemed invalid if the price closes below 1505.

United Spirits

Buy MCDOWELL_N in cash @ Rs 1024.65, stop-loss @ Rs 990, target: Rs 1075

MCDOWELL_N is currently trading at 1024.65 levels, and it has recently experienced a bounceback from a support level of 985. This bounce suggests that there is significant buying interest in the stock when it approaches the 985 level, which has provided upward momentum.

Moreover, the fact that the stock is trading above all important moving averages is a positive signal for traders and investors.

The Relative Strength Index (RSI) indicator, hovering near 52 levels, indicates that the stock is neither overbought nor oversold. This balance suggests that there is room for the stock to move upwards without being in an extreme condition.

However, there is a small resistance level at 1050. If MCDOWELL_N can successfully close above this level, it may continue its upward trajectory, potentially targeting 1075 and beyond.

Based on the above analysis MCDOWELL_N can be purchased at a CMP of 1024.65 with an SL of 990 levels for the target of 1075 levels.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor 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.