The 30-share BSE Sensex opened higher by 77.76 points, or 0.11%, at the 73,973.30 level, while the Nifty 50 started off at the 22,489.75 level, up 47.10 points, or 0.21%.
The under performance of the Indian market in spite of encouraging global cues is a noteworthy near-term pattern in the market, according to Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. The market, which had already priced in a BJP/NDA win, is now a little uncertain. This may be the cause of the market’s anxiety and the bulls’ decision to soften their aggressive stance. The India VIX increased by 46% in the past month and is currently trading at 16.6. This indicates that there will be volatility and uncertainty for a while.
Also Read: Sensex Today Live Updates : Sensex, Nifty green at open; Lupin falls 4%, Godrej Consumer gains 6%
Market Review and Outlook – Ruchit Jain
Nifty 50 traded within a narrow range at the start of the week, but a lot of sector specific momentum was seen on both sides of the trade. The market breadth was more in favour of declines, while the index ended below 22,450 with a marginal loss, said Ruchit Jain, Lead Research Analyst at 5paisa.
Post the sharp sell-off from the highs on Friday last week, the Nifty 50 consolidated in a range, but the volatility index (INDIA VIX) rallied by another 13 percent on Monday. A rise in VIX and negative market breadth indicate nervousness amongst market participants. The Nifty 50 has witnessed selling pressure twice in the last one month around the 22,750–22,800 level, and 22,300 is an important 40 EMA support. As of now, the broader trend is positive, but considering the above factors, if the index breaks the mentioned support in the near term, then we might see a move up to the 22,000–21,900 zone. On the other hand, a move above 22,800 will lead to a resumption of the momentum in the index, explained Ruchit.
Share market tips today
Traders are advised to trade with a stock specific approach and look for sectors/stocks outperforming. The Nifty FMCG index has seen a positive RSI divergence recently and the index is on the verge of a breakout from its consolidation. Since this sector has seen a correction, the risk rewards seem favourable to taking contra trades here with swing low as stop loss, advised Jain.
Stocks in focus today – Ruchit Jain
On stocks in focus on Tuesday, Ruchit Jain recommends buying two stocks: Hindustan Unilever Ltd (HUL) and Dabur India Ltd.
Hindustan Unilever Ltd (HUL)
Ruchit stated that the FMCG stocks have gone through a corrective phase in the last few months, and the FMCG index has now been witnessing a positive RSI divergence. Thus, we expect a stock-specific pullback from this sector, and HUL has seen a lower low in price but a higher low in RSI. Such set-ups usually lead to a reversal or a pullback move, and hence, we anticipate an upmove in the stock in the short term. Traders can look to buy the stock in the range of ₹2,260–2,240 for potential targets of ₹2,350 and ₹2,420. The stop loss on long positions should be placed below ₹2,170.
Also Read: Nifty 50, Sensex today: What to expect from Indian stock market in trade on May 7
Dabur India Ltd
Jain explained that the stock has been consolidating in a broad range since last few months and stock witnessed buying interest post the recent quarterly results. The RSI has given a positive crossover, and the volumes are good as the pullback is seen from the support end of the range. We expect the stock to rally higher in the near term towards the higher end, and hence, short-term traders can look to buy the stock in the range of ₹530–525 for a potential target of ₹560. The stop loss on long positions should be placed below ₹510.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 07 May 2024, 10:00 AM IST
