NIFTY OUTLOOK & TRADING TIPS FOR 24 SEP 2024

Overview:

Indian equity indices extended their gains for the third consecutive session, with the Nifty crossing the 25,900 mark, driven by optimism and a positive bias throughout the day. The Sensex rose by 384 points (0.45%) to close at 84,928, while the Nifty gained 148 points (0.57%), ending at a record level of 25,939.

Key Market Movements:

• Nifty: The index opened with a gap-up and traded positively, rising toward the upper end of a rising channel in the 26,000-26,100 zone. While the momentum indicators on daily and hourly charts indicate caution due to divergence, the uptrend remains intact as long as there is no major price weakness. Traders are advised to use a trailing stop-loss at 25,700.
• Bank Nifty: Continuing its bullish trend, Bank Nifty is approaching the 55,000 mark, with pullbacks being seen as buying opportunities. The support zone is now between 53,350-53,500 as per the principle of role reversal.
• Midcaps and Smallcaps: Broader markets outperformed, with midcaps gaining 0.84% and smallcaps surging by over 1%, indicating renewed interest from market participants.

Sector Performance:

• PSU Banks and Realty: These were the top-performing sectors, with the PSU Bank index rising more than 3% and the Realty index advancing by over 2%.
• Other Gainers: Sectors such as auto, energy, FMCG, metal, pharma, and media all saw gains ranging from 0.5% to 1%.
• IT Sector: The Information Technology sector, however, lagged, shedding 0.5% during the session.

Top Gainers:

• M&M
• ONGC
• Bajaj Auto
• SBI Life Insurance
• Hero MotoCorp

Top Losers:

• Eicher Motors
• Divis Labs
• ICICI Bank
• Tech Mahindra
• IndusInd Bank

Market Sentiment:

The euphoria following the recent Federal Reserve rate cut lifted domestic markets, supported by benign input costs and expectations of a shift in the RBI’s stance. Additionally, inflows from Foreign Institutional Investors (FII) added to the bullish sentiment, offsetting concerns from moderating PMI data.

Technical Outlook:

• The Nifty's psychological resistance lies at 26,000, which is expected to be a key hurdle for further upside.
• On the downside, 25,800-25,850 serves as a strong support zone, suggesting that any profit-taking correction could find buyers in this range.
• For Bank Nifty, the immediate support rests in the 53,350-53,500 area, with 55,000 acting as the next upside target.

Market Breadth:

• Advances: 2,274 shares
• Declines: 1,661 shares
• Unchanged: 118 shares

Conclusion:

The Indian stock market remained in a firm uptrend, fueled by positive global cues and strong sectoral performances, particularly in PSU Banks and Realty. The market sentiment remains optimistic, though short-term caution is advised as the indices approach critical resistance levels. Investors are encouraged to maintain a trailing stop-loss to protect profits, while traders can use intraday dips as opportunities for accumulation, especially in leading sectors.