Nifty will aim to hit new record high with Fed rate cut on the horizon

*Morning Action @ 7 AM – Wednesday, September 18th 2024*

# In early action, Gift Nifty is seen wavering indicating Nifty may spend the day searching for direction.

# That’s in-line with our call of the day which suggests bullish sentiments will struggle to get off the mat as uncertainty swirls over the magnitude of the upcoming Fed rate cut.

# That’s said, bullish sentiments shall prevail as a cut of either 25 basis points or 50 basis points is expected.

*7:00 AM GLOBAL UPDATE:*
# GIFT Nifty 🇮🇳: (-8, 25455)
# Dow Futures: (+27, 41633)
# Nasdaq 100 Futures (+36, 19469)

# Nikkei (+347, 36550)
# Hang Seng (Closed, 17660)

# Dow Jones (-16, 41606)
# Nasdaq (+36, 17628)
# Bovespa (-692, 134426).

MARKET TRENDS:
# Global: Positive
# FII: Positive (+482.69 Cr)
# DII: Positive (+874.15 Cr)
# Sentiment: Bullish
# Market Breadth: Positive
# Technicals: Higher High/low
# F&O: 24500 – 26000 zone.

# INDIA VIX 12.59 (+1.04%)
# Nifty PCR (26th Sept) 1.66
# Bank Nifty PCR (25th Sept) 0.88

# Nifty Outlook: Nifty will aim to hit new record high with Fed rate cut on the horizon

# WHAT TECHNICALS TELLS US ON NIFTY & BANK NIFTY:

Nifty Technically:
Nifty (CMP: 25419)
SUPPORT: 25292/25000
RESISTANCE: 25551/26000
RANGE: 25350-25550
BIAS: Positive
21 DMA: 25084
50 DMA: 24736
200 DMA: 22837

Bank Nifty Technically:
BANK NIFTY (CMP 52189):
SUPPORT: 51643/51025
RESISTANCE: 52501/53359
RANGE: 51700-52700
BIAS: Positive
21 DMA: 51310
50 DMA: 51311
200 DMA: 48740

*WHAT EXACTLY HAPPENED AT WALL STREET IN OVERNIGHT TRADE:*

# Wall Street ended little changed in Tuesday’s trade, as uncertainty mounted about the size of the Federal Reserve rate cut.

# The S&P 500 and the Dow Jones finished muted after both hit records, while the Nasdaq edged higher by 0.2%.

# The Federal Open Market Committee wraps up with a policy statement to be issued at 2 pm Eastern. While the FOMC is almost certain to lower borrowing costs from a 23-year high, the size of the reduction remained a matter of hot contention.

# As of writing, according to CME Group’s FedWatch Tool, futures traders are pricing in a 63% chance for a larger 50 basis-point (0.50%) cut, up from 30% one week ago. Odds for a quarter-point (0.25%) rate cut have fallen to 37% from 70%.

# WTI Crude oil trades firm at the $71.03 per barrel, driven by disruptions from storm Francine.

# COMEX Gold consolidates at $2573 per ounce.

 

NEED TO KNOW:

# This Wednesday morning, Gift Nifty is seen wavering, indicating another listless session.

# The good news surrounding Modi 3.0 government’s completion of 100 days is that the benchmark Nifty and Sensex have galloped around 8%.

# But for the day, the trading theme shall revolve around whether the Federal Reserve will kick off its rate-cutting cycle with a jumbo 50 basis point cut or a 25-basis point cut?

# Now, before we get into detail, here are the stocks which are on the front pages and catching attention:

1) The stock price of Adani Power and Adani Green are in limelight on reports that they will supply 6,600 MW of solar and thermal power to Maharashtra, strengthening their role in the state and helping India’s shift to renewable energy.

2) Tata Sons chairman N Chandrasekaran has said that Tata Motors and Jaguar Land Rover (JLR) will now manufacture electric vehicles in India for global markets.

3) Bajaj Housing Finance share price has zoomed towards Rs 182, surging 160% above the IPO issue price of Rs 70.

# In yesterday’s trade, FIIs turned out to be net buyers to the tune of Rupees 483 crores while DIIs too bought shares to the tune of Rupees 874 crores.

# The Nifty options data suggests Nifty is likely to be in a trading range of 25000-26000 zone. Maximum Call OI is at 26000 followed by 26500 strike prices. So, the 26000 mark is now Nifty’s major resistance zone on closing basis.

Maximum Put open interest stands at 25500 levels followed by 25200 levels.

Call writing was seen at 26000 and then at 25800 strike price, while there was meaningful Put writing at 25400 and then at 25300 strike prices.

# But our call of the day suggests that bullish sentiments are likely to be on the rise!

# The trading theme shall squarely revolve around whether the Federal Reserve will kick off its rate-cutting cycle with a jumbo 50 basis point cut or a 25-basis point cut?

Mr. Powell’s Press Conference at 2:30 will be the biggest event of the day.

# Now, here is the preferred trade on Nifty and Bank Nifty:

Nifty (25419): Buy at CMP. Stop at 24951. Zone. Targets 25500/25701. Aggressive targets at 25900-26100 zone.

Bank Nifty (52188): Buy at CMP. Stop at 51001. Targets 52357/53359. Aggressive targets at 54000-55000 zone.

# Our chart of the day is bullish on CUMMINS, PERSISTENT SYSTEM and MPHASIS BFL on any intraday weakness with an interweek perspective.

# The 1 Stock to Buy Right Now:

Buy MPHASIS (CMP 3178): Buy at CMP. Stop at 3089. Targets 3233/3309. Aggressive targets at 3501. (Interweek Strategy). Rationale: Momentum oscillators in bullish mode. Higher high/low.

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