Market Insights Report: Jan 12, 2024
As the Indian stock market continues to navigate turbulent waters, it witnessed a consolidation phase on Thursday, largely influenced by sluggish global market cues. The benchmark BSE Sensex recorded a drop of over 200 points, while the Nifty50 index fell below the significant 23,650 level within the first fifteen minutes of trading.
Current Trading Atmosphere
Foreign Institutional Investors (FIIs) have been offloading equity at a substantial rate, with net sales amounting to ₹10,419 crore in January alone. The strong dollar index, currently at 109, coupled with a 10-year bond yield of 4.67%, has created an environment where FIIs may persist in their sell-off strategy, putting further pressure on the Indian markets in the near term. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that the forthcoming Q3 results season, beginning today with Tata Consultancy Services (TCS), will elicit market reactions and set the tone for the performance of the IT sector.
Options Market Breakdown
Analyzing the options data, the maximum Call Open Interest (OI) is concentrated at the 24,000 strike, followed closely by 24,100. Conversely, the maximum Put OI is predominantly at the 23,500 strike, with additional positioning around the 23,000 strike.
Call writing has been noted at the 23,700 and 23,800 strikes, while Put writing is being observed at the 23,500 and 23,600 strikes. Chandan Taparia, Head of Equity Derivatives & Technicals at MOFSL, indicated that this options data suggests a broader trading range expected between 23,300 and 24,300, with an immediate focus between 23,500 and 23,900 levels.
“If the Nifty remains below the 23,800 mark, we may see further weakness towards levels of 23,600 and then 23,500. However, resistance levels stand at 23,800 and subsequently at 24,000,” recommended Taparia.
Expert Stock Recommendations
In light of current market conditions, several experts have curated a list of stocks from the Futures & Options (F&O) basket paired with cash market transactions aimed at investors with a short-term trading horizon.
Recommendations from Market Expert Kunal Bothra:
- ONGC: Buy with a target of ₹285 and a stop loss at ₹264.
- Tata Motors: Buy with a target of ₹825 and a stop loss at ₹775.
- LT Finance: Buy with a target of ₹149 and a stop loss at ₹140. Insights from Independent Technical Analyst Nooresh Merani:
- GAIL India: Buy with a target of ₹200 and a stop loss at ₹186.
- Bank of Baroda: Buy with a target of ₹245 and a stop loss at ₹226. Disclaimer: These recommendations and insights are the opinions of the respective experts and do not necessarily reflect the views of the Economic Times.
Looking Ahead
As traders and investors brace for the impact of upcoming quarterly results, market participants remain on edge amidst the backdrop of high FII selling activity and fluctuating global sentiments. Monitoring these factors, along with key resistance and support levels in the Nifty and Sensex, will be crucial in navigating the trading landscape in the coming days.
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