Stock market today: Trade setup for Nifty 50 to Israel-Iran war; five stocks to buy or sell on Monday— Oct 7

Stock market today: The sharp pullback in the markets, led by the Israel-Iran war meant that the Nifty 50 index ended 4.4% lower week-on-week. The Sensex, at 81,688.45, also ended with similar cuts. Metals and IT were the top outperformers, while realty and autos were the top underperformers. 

Bank Nifty, at 51462.05, too, ended with 4.6% week-on-week losses. The mid-cap index lost around 3.1% and the small-cap index 1.8%, outperforming large-caps.

Trade setup for Monday

Over the past week, Nifty fell retracing the gains of several weeks. This is a negative sign, though oversold conditions may mean a small pullback in the near term, said Deepak Jasani, Head of Retail Research at HDFC Securities. Nifty could now take support at 24,753 and later 24,420 while 25,453 could act as a resistance in the near term, he added.

Bank Nifty tested the 20-week moving average of 51,350 on Friday and the index has also reached a crucial support zone. Jatin Gedia – Technical Research Analyst at Sharekhan said he expects a pullback over the next few trading sessions. On the upside, we expect a pullback towards 52,200 – 52,600 with the crucial support zone placed at 51,400 – 51,300, Gedia added. 

Global market amidst Iran-Israel war

Global indices including Asia, Europe and the US were mostly higher on Friday after worsening tensions in the Middle East sent stocks lower on Thursday. While rising crude prices remain a concern, the US markets were boosted by the higher-than-expected non-farm payroll data.

“We expect markets to consolidate next week amid cautiousness due to fear of increasing tensions in West Asia. With the start of the earning season next week, stock-specific action will continue,” said Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services.

The RBI's monetary policy will also remain in focus. While a rate cut is not on the table, commentary will be important.

Stocks to buy today

Sumeet Bagadia, Executive Director at Choice Broking recommended two stock picks for Monday. Also, Ganesh Dongre, Senior Manager - Technical Research at Anand Rathi suggested three stock ideas for today.

These include Sundaram Finance Ltd, Info Edge (India) Ltd (Naukri), Reliance Industries Ltd, Aurobindo Pharma Ltd and Piramal Enterprises Ltd.

Sumeet Bagadia's stocks to buy today

1. Sundaram Finance Ltd - Bagadia recommends buying Sundaram Finance at ₹5,332.8, keeping the stop loss at ₹5,145.38 for a target price of ₹5,705.

Sundaram Finance is currently trading at ₹5332.8 and has formed a strong bullish candle on the daily chart, indicating a potential reversal from key support levels. The stock has shown a bounce from its support zone, signalling a reversal pattern that is supported by an increase in trading volumes, reflecting a bullish outlook. If the stock sustains above the critical level of ₹5,400, it is likely to continue its upward momentum, targeting ₹5,705.

2. Info Edge (India) Ltd (Naukri)- Bagadia recommends buying Info Edge (India) shares at ₹8,198.65, keeping a stop loss at ₹7,900 for a target price of ₹8,666. 

The stock is currently trading at 8,198.65 levels. The stock has surged significantly, marking a new high of ₹8,308.90, a positive sign that the upward momentum may continue. This sustained growth is underpinned by positive market sentiment supported by higher trading volumes, which suggests that more investors are confident in the stock's potential.

Ganesh Dongre's stocks to buy today

3. Reliance Industries Ltd - Dongre recommends buying Reliance Industries Ltd at ₹2,770, keeping a stop loss at ₹2,720 for a target price of ₹2,850.

Reliance Industries stock has substantial support at ₹2,720, marking a crucial juncture in its recent trading. Presently, at ₹2,770, the stock has demonstrated a definitive reversal in price action, suggesting a potential continuation of its upward momentum. Traders keen on seizing this opportunity could consider buying and holding the stock, setting a prudent stop loss at ₹2,720. The anticipated target for this trade is ₹2,850, representing the next significant resistance level. This strategy positions traders favourably to capitalise on the stock's anticipated rally in the weeks ahead.

4. Aurobindo Pharma Ltd -  Dongre recommends buying Aurobindo Pharma at ₹1,460, keeping a stop loss at ₹1,430 for a target price of ₹1,520.

In the recent short-term trend analysis of the Aurobindo Pharma stock, a notable bullish reversal pattern has emerged. This technical pattern suggests the possibility of a temporary retracement in the stock's price, potentially reaching around ₹1,520. At present, the stock is maintaining a crucial support level at Rs1,430. Given the current market price of ₹1,460, a buying opportunity is emerging. This suggests that investors might consider purchasing the stock at its current price, anticipating a rise towards the identified target of ₹1,320.

5 . Piramal Enterprises Ltd - Dongre recommends buying Piramal Enterprises at ₹1,032 with a stop loss of ₹1,010 and a target price of ₹1,080. 

On the daily chart of Piramal Enterprises stock, a breakout at the ₹1,032 price level has been observed, signalling a potential upward trend. Complementing this breakout, the Relative Strength Index (RSI) is still turning up, indicating increasing buying momentum. Given these technical indicators, traders can consider buying on dips, entering the stock at a lower price point. To manage risk, a stop loss at ₹1,010 is recommended. The target price for this strategy is ₹1,080 in the upcoming weeks, suggesting a potential gain as the stock continues its upward trajectory.

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 taking any investment decisions

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