Stock market today: Indian stocks saw a slight increase on Wednesday, driven by the auto and consumer sectors, in anticipation of a Goods and Services Tax Council meeting, where tax reductions are likely on various goods.
As of 9:15 IST, the Nifty 50 increased by 0.15% to 24,616.50, while the Sensex rose by 0.17% to 80,295.99.
Market participants are optimistic that the council could unveil initiatives to foster economic growth and enhance domestic spending as external challenges persist.
Analysts contend that the GST Council’s choice will significantly influence market trends in the days ahead.
Market Outlook by Jay Thakkar, Vice President & Head of Derivatives and Quant Research, ICICI Securities
Nifty 50
Nifty 50 has managed to hold on to its previous swing low of 24,347 levels, however, it is not able to sustain at the higher levels, so the trend is still weak. The FII net long % stands at approximately 9% which is still oversold hence a short covering can’t be ruled out, however, they have been continuously selling in the equity cash segment which is concern indicating more weakness in the markets.
The IVs are still low at 10.43 levels with IVP and IVR data at 8 and 9.94 respectively indicating that there is a higher probability of an increase in volatility which is negative for the Index. The Index as of now is trading within a range of 24,800 to 24,400 levels and beyond those 25,000 and 25,300 levels. The Bank Nifty is relatively weaker than Nifty 50 and till there is no reversal in it the bounce in Nifty 50 will be short lived, hence the short-term bias is sideways to negative within which there can be a dead cat bounce.
Stocks To Buy in the near-term – Jay Thakkar
Jay Thakkar of ICICI Securities recommends Godrej Consumer Futures, Hindalco Futures, and Infosys Futures.
Buy Godrej Consumer Futurest in the range of ₹1,285-1,295; stop loss at ₹1,245; targets of ₹1,350 and ₹1,380
Godrej CP has been consolidating within a range of ₹1,175 to ₹1,300 since past couple of months now and it is likely to breakout on the upside as the overall NIFTY FMCG Index seems to be breaking upwards. On the upside, 1,300 is the strong resistance as there is high call writing at those levels, however, above those levels there will be high momentum due to call unwinding. There has been call unwinding at the lower levels at 1,240 and 1,260 strikes and the stock’s max pain is at 1,260 and its trading above the same which is a positive sign as well. It is also trading well above its 20-day VWAP which is at 1,232, so based on the above observations the short-term bias is positive for the stock.
Buy Hindalco Futures in the range of ₹720-725; stop loss at ₹709; targets of ₹740 and ₹750
Hindalco Futures has been moving up now with long built up as most after witnessing couple of months of short covering which is a positive sign now. It has also taken off its multiple swing resistances of ₹710 hence the stop loss now can be placed below the same. There has been call unwinding at 710 levels and put additions at 700 strike so there is a good support at the lower levels, however, on the upside 730 strike has the highest call base which needs to be taken off for a smooth upward momentum. The stock is trading well above its 20-day VWAP as well as its max pain levels so these levels will act as its crucial supports going forward.
Buy Infosys Futures in the range of ₹1,495-1,505; stop loss at ₹1,474; targets of ₹1,535 and ₹1,550
Infosys has witnessed good short-term bounce back on account of short covering as well as bullish crossover in the momentum indicators which is a positive sign. There have been good put additions right from 1400 to 1500 strikes which clearly indicates support at the lower levels, however, 1580 and 1600 strikes have the highest call base, so the targets recommended are well before those resistance levels. Now, the stock is trading just below its max pain of 1500 levels however, it is above its 20-day VWAP of 1482 which will act as a support. The stock is thus likely to trade with a positive bias with a limited upside in the near term.