By Ajit Mishra
Markets have started the calendar year 2024 on a muted note and witnessing consolidation amid mixed cues. Participants are in the profit taking mood tracking weak global cues and also due to cautious stance ahead of the beginning of the earnings season.
However, the tone is still positive, thanks to rotational buying in heavyweights across sectors. Interestingly, the continued strength in the broader indices is further adding to the positivity despite overbought reading.
As we enter into the earnings season, the focus will be on the IT majors to start with. The recent dip in the tech-heavy US index, Nasdaq, putting pressure on our IT counters too however the downside seems capped now.
Besides, we are seeing profit taking in the US market benchmark index, after the 9-week of successive advances and their further decline may impact the trend in our markets too. Needless to say, the support is intact around the 36,500-37,100 zone in the Dow Jones Industrial Average (DJIA) and bias would again turn positive above the 37,800 level.
Keeping in mind the above factors, we suggest focusing on stock-specific opportunities across sectors and avoiding aggressive trades. We have highlighted the key levels for both Nifty and the banking index along with the list of stocks, which participants can consider for trades based on the market direction.
Nifty (CMP: 21,513.00) – The recent price action in the Nifty index shows indecisiveness and we may see further consolidation. A decisive close above 21,800 would prompt the next leg of the up move towards 22,150 else consolidation will continue, with a cushion around the 21,200-21,500 zone.
Bank Nifty (CMP: 47,450.25) – The banking index is also trading in tandem with the benchmark and witnessing consolidation. A mixed trend in private bank majors is keeping the participants guessing over the next possible move. To regain momentum and inch towards the new milestone of “50,000”, it should hold above the 48,600 level. On the downside, the 46,500-47,300 zone would offer support in case the profit taking extends. We reiterate our view to stay selective and limit aggressive trades.
Stocks to Watch
Bullish- ABCapital, AU Bank, Biocon, Cipla, Cumminsind, Manappuram, Tvsmotor.
Bearish- Balrampurchin, Bandhan Bank, Indiamart, Navinfluor, PVR Inox, SBI Card, UPL.
(Ajit Mishra, SVP- Technical Research, Religare Broking. Views expressed are author’s own. Please consult your financial advisor before investing.)