Nifty’s bullish sentiments will struggle to get off the mat as uncertainty swirls over the magnitude of the upcoming Fed rate cut

*Morning Action @ 7 AM – Tuesday, September 17th 2024*

# In early action, Gift Nifty is seen trading above the dotted lines but our call of the day suggests bullish sentiments will struggle to get off the mat as uncertainty swirls over the magnitude of the upcoming Fed rate cut this Wednesday, September 18th.

*7:00 AM GLOBAL UPDATE:*
# GIFT Nifty 🇮🇳: (+28, 25491)
# Dow Futures: (-56, 41566)
# Nasdaq 100 Futures (-20, 19403)

# Nikkei (-547, 36035)
# Hang Seng (-35, 17386)

# Dow Jones (+228, 41622)
# Nasdaq (-92, 17592)
# Bovespa (+236, 135118).

MARKET TRENDS:
# Global: Positive
# FII: Negative (-1634.98 Cr)
# DII: Positive (+754.09 Cr)
# Sentiment: Risky
# Market Breadth: Positive
# Technicals: Higher High/low
# F&O: 24500 – 26000 zone.

# INDIA VIX 12.46 (-0.72%)
# Nifty PCR (26th Sept) 1.63
# Bank Nifty PCR (25th Sept) 0.86

# Nifty Outlook: An up-and-down session is quite likely.

# WHAT TECHNICALS TELLS US ON NIFTY & BANK NIFTY:

Nifty Technically:
Nifty (CMP: 25384)
SUPPORT: 25189/24885
RESISTANCE: 25551/26000
RANGE: 25300-25550
BIAS: Positive
21 DMA: 25044
50 DMA: 24714
200 DMA: 22809

Bank Nifty Technically:
BANK NIFTY (CMP 52153):
SUPPORT: 51643/51025
RESISTANCE: 52501/53359
RANGE: 51700-52700
BIAS: Positive
21 DMA: 51223
50 DMA: 51320
200 DMA: 48698

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

# Wall Street ended mixed in Monday’s trade but the positive takeaway was that the Dow Jones index scales a new closing record high.

# The Dow Jones ended at its highest level on record and was up 0.6%, hitting its first record close since Aug. 30. The S&P 500 was up 0.1%. The Nasdaq Composite however dropped 0.5%.

# *The street is convinced that the Federal Reserve will lower the federal funds rates but traders will spy with one big eye on how large that cut will be and most importantly, investors will be on the lookout for the Fed’s Summary of Economic Projections, or dot plot, which includes central bankers’ expectations for where the interest rates will be over the next few years.*

# The good news this Tuesday morning is that overnight Former New York Federal Reserve President William Dudley made the case for a half-point rate cut, adding that he thinks the Fed will favor such an aggressive approach.

# 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 $70.30 per barrel, driven by disruptions from storm Francine.

# COMEX Gold consolidates at $2580 per ounce.

 

 

NEED TO KNOW:

# The good news this Tuesday morning is that overnight Former New York Federal Reserve President William Dudley made the case for a half-point rate cut, adding that he thinks the Fed will favor such an aggressive approach

Overnight, the Dow Jones scaled a fresh all-time high now at its highest level on record; hitting its first record close since Aug. 30.

# This Tuesday morning, Gift Nifty is seen trading above the dotted lines but our call of the day suggests bullish sentiments will struggle to get off the mat as uncertainty swirls over the magnitude of the upcoming Fed rate cut this Wednesday, September 18th.

# The trading theme actually revolves around expectations of jumbo rate cut from the Federal Reserve

# The odds of bigger rate cut is on the rise at the Fed policy outcome on September 18th

# As of recording, according to CME Group’s FedWatch Tool, futures traders are pricing in a 53% probability for a 0.25% cut and a 47% chance it’ll be 0.50%.

# Our call of the day suggests Nifty is likely to trade listless with its new record high at 25445.70 mark as a major hurdle.

# In yesterday’s trade, FIIs turned out to be net sellers to the tune of Rupees 1635 crores while DIIs too bought shares to the tune of Rupees 754 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 25000 levels followed by 25200 levels.

Call writing was seen at 26000 and then at 25700 strike price, while there was meaningful Put writing at 25400 and then at 24600 strike prices.

# On the positive side, India VIX has dropped further towards 12.45.

In yesterday’s trade; Bajaj Housing Finance shares made a bumper debut and zoomed towards Rs 165, surging 136% above the IPO issue price of Rs 70.

The m-cap of the Bajaj Housing Finance surpassed Rs 1-trillion mark within minutes of the mega listing. (Source: Business Today)

Dixon Technologies (India) was star outperformer on Monday, up 7% to scale a new high of Rs 14,056 after Padget Electronics (Padget) signed a memorandum of understanding with Asus India (Asus) to manufacture information technology products such as notebooks for the company. (Source: Business Standard)

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

Nifty (25384): Buy at CMP. Stop at 24951. Zone. Targets 25500/25701. Aggressive targets at 25900-26100 zone.

Bank Nifty (52153): Buy at CMP. Stop at 51001. Targets 52357/53359. Aggressive targets at 54000-55000 zone.

# Our chart of the day is bullish on BIOCON, SYNGENE and TATA COMMUNICATION on any intraday weakness with an interweek perspective.

# The 1 Stock to Buy Right Now:

Buy EXIDE INDUSTRIES (CMP 490): Buy at CMP. Stop at 477. Targets 505/529. Aggressive targets at 561. (Interweek Strategy). Rationale: Momentum oscillators turning bullish. Oversold zone.

 

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*RISK DISCLOSURES ON DERIVATIVES:*

# 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.

# On an average, loss makers registered net trading loss close to 50,000.

# Over and above the net trading losses incurred, loss makers expended an additional 28%of net trading losses as transaction costs.

# Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.

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This does not construe to be an investment advice. Stock market investments are subject to market risks. All information is a point of view, and is for educational and informational use only. The author accepts no liability for any interpretation of articles or comments on this platform being used for actual investments.

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