Stock market today: Trade setup for Nifty 50 to US Fed rate cut, five stocks to buy or sell on Thursday — Sept 19

Stock Market Today: The nervousness in the market ahead of the Federal Open Market Committee (FOMC) meeting outcome was evident in the Indian stock market during trading session on Wednesday. The Benchmark Nifty 50 index and the S&P BSE Sensex ended 0.16 % lower at 25,377.55 and 82,948.23 on Wednesday amidst profit booking after scaling all time highs during the day.

The Nifty Bank Index after consolidating for a day however ended 1.08% higher at 52,750.40 on expectations of rate cut by the US federal Reserve. Nifty Financial Services was also a key gainer (up 1.4%) supporting the markets on day when most other sectoral indices ended lower. Broader markets remained under pressure and Nifty Midcap 100 and Small cap 100 indices underperformed the Nifty where they fell by 0.8% each.

Trade setup for Thursday

“The Nifty index reached a new all-time high ahead of the important announcement from the Federal Reserve about interest rates. However, some traders decided to take profits at these higher levels, which caused the market to close about 130 points below its peak for the day” said Rupak De, Senior Technical Analyst, LKP Securities.

Lately, Nifty has been moving within a small range. On the downside, there is support at 25,300. If Nifty falls below this level, it could lead to a further drop towards the 24,900-25,000 range. On the upside, 25,500 is acting as a resistance level, meaning it may be difficult for the market to move above this point in the short term, added De.

Bank Nifty started the day on a flat note but subsequently witnessed strong buying interest, which helped it achieve its short-term targets of 52,800-53,000 (with a high of 52,954). Technically, the index formed a strong bullish candle on a daily scale, indicating strength. However, it will encounter short-term resistance near 53,000 and if Bank Nifty sustains above this level, the rally could extend toward 53,500-53,800, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd.

US Fed rate cut in focus

Assessing the impact of the 50 bps US Fed rate cut, Shashank Pal, Chief Business Officer at PL Wealth Management, said, "This rate cut by the Fed will bring down the borrowing costs of US companies and also push central banks across the world to relook at their own monetary policy this week. The 50 bps US Fed rate cut may cause a short-term spurt in our domestic stock prices, only to realign after possibly four to six weeks.”

Stocks to buy today

Sumeet Bagadia, Executive Director at Choice Broking and Ganesh Dongre, Senior Manager of technical Research at Anand Rathi have recommended five stock picks for Thursday. These include Nava Ltd, Bajaj Finance, Vedanta Ltd, Federal Bank, Intellect Design Arena Ltd.

Sumeet Bagadia's stocks to buy today

1.Nava Ltd- Sumeet Bagadia Executive Director at Choice Broking recommends buying Nava Ltd in cash at ₹1316.2 keeping Stop Loss at ₹1270 for a target price of Rs1390

NAVA daily chart analysis offers a favorable view for the following week, indicating a steady higher advance, said Bagadia. Notably, the stock has produced a notable higher high and higher low pattern, and the company's recent upward swing has effectively violated the neckline, establishing a new week high. This breakthrough indicates the possibility of a significant follow-through upward increase in the stock price.

2. Bajaj Finance - Sumeet Bagadia recommends buying Bajaj Finance at ₹7631.10 keeping a stoploss at ₹7385 with a target price of ₹8185

Baja Finance is currently trading around 7631.10 and has recently broken out of a falling trend line and consolidation. The stock has also retested the consolidation breakout and has bounced from the levels of 7385 levels. This movement typically signals a potential continuation of bullish momentum. The stock has a key resistance in a zone between 7700-7800. A successful breakout above this range could pave the way for a short-term target of 8185.

Ganesh Dongre, stocks to buy today

3. Vedanta Ltd - Ganesh Dongre recommends buying Vedanta at ₹448 with a Stoploss at ₹435 for a target price of ₹465

The stock found a substantial support level at Rs.435, marking a crucial juncture in its recent trading. Dongre. Presently, at Rs. 448, 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 Rs.435. The anticipated target for this trade is Rs.465, representing the next significant resistance level. This strategy positions traders favorably to capitalize on the stock's anticipated rally in the weeks ahead..

4- Federal Bank - Ganesh Dongre recommends buying Federal Bank at ₹186 with a stop loss at ₹180 and target price of ₹195

In the recent short-term trend analysis of the 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 Rs. 195. At present, the stock is maintaining a crucial support level at Rs.160. Given the current market price of Rs.186, 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 Rs. 195

5.Intellect Design Arena Ltd- Ganesh Dongre recommends buying Intellect at ₹986 with at Stoploss at ₹970 for a target price of ₹1025

On the daily chart of this stock, a breakout at the Rs.986 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 Rs. 970 is recommended. The target price for this strategy is Rs. 1025 in the upcoming weeks, suggesting a potential gain as the stock continues its upward trajectory, said Dongre.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.