 "Nifty levels, Q4 result, IPOs: Things to know before Opening Bell on May 21")
Pre-market update for Indian stock market on Tuesday, May 21, 2024: Indian stock markets are expected to start Tuesday's trading session on a positive note. Markets were shut on Monday, May 20, on account of Lok Sabha elections in Maharashtra under the fifth phase of voting.
At 7:05 AM, GIFT Nifty was ruling 64 points higher at 22,608 level.
Analysts expect markets to remain volatile in the near-term as investors anticipate the Lok Sabha election results; India Inc enters the last leg of March quarter earnings; and foreign institutional investors (FIIs) adjust their positions in the Indian stock markets.
"Investors are expressing optimism regarding potential interest rate cuts in 2024, supported by favourable US consumer inflation data and improved jobless claims figures. However, uncertainties persist regarding the timing of the US Fed rate adjustments. The release of the PMI data for May, from both the US and India, this week will be closely monitored for further market insights," said Vinod Nair, head of research at Geojit Financial Services.
Amidst ongoing uncertainties surrounding election results and quarterly earnings, we anticipate continued volatility in the near-term, he added.
Trading triggers for Indian stock markets on Tuesday, May 21:
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Trading action may take cues from global mood on Tuesday, where the US markets are hitting record highs.
That apart, buying and selling activity by FIIs, investor reaction to Q4FY24 corporate earnings, and primary market action will sway the market sentiment.
The initial public offering (IPO) of Rulka Electricals, and Hariom Atta & Spices will close for subscription today.
Further, the stocks of ABS Marine Services, Mandeep Auto Industries, and Veritaas Advertising will be listed in the SME category.
Global markets
Asia-Pacific markets started Tuesday mixed as tech shares pushed the Nasdaq Composite to record highs.
Nvidia shares gained more than 2 per cent overnight on multiple bullish analyst calls. With this, the tech-heavy Nasdaq gained 0.65 per cent to reach an all-time intraday high and close at a record level at 16,794.87.
The 30-stock Dow Jones, however, fell 0.49 per cent, while the broad market S&P 500 inched up 0.09 per cent.
In Asia, this morning, all but Japan’s Nikkei gave up morning gains. Hang Seng was down 0.8 per cent, Kospi 0.5 per cent, and ASX200 0.15 per cent. On the flipside, Nikkei was up 0.34 per cent.
Trading strategy for Tuesday, May 21: Should you be a buyer or a seller today? Here’s what markets experts recommend:
1) As per Put-Call Ratio
After a sideways movement during the special trading session, held on Saturday, May 18, 2024, the Nifty50 index stands at 22,502.
The Long-Short ratio improved to 28 per cent on May 17, from 26 per cent on May 16, as the foreign portfolio investors (FPIs) built more long positions compared to short positions in Index futures.
"The 22,200 & 22,300 Strike saw Call writers (Bears) exiting and Put writing, which kept the Index steady throughout the day. Strong Put writing was observed at the 22,400 Strike in Nifty. Besides, the Call writers (Bears) still lead the Put writers (Bulls) by a fair margin at the 22,500 Strike," said Ashwin Ramani, derivatives & technical analyst at SAMCO Securities.
For the Nifty to make a sharp upside move, Call writers (Bears) need to exit from the 22,500 Strike.
"Heavy writing is visible in both CALL and PUT at the 22,500 strike, indicating a sense of inflection. Therefore, traders need to be watchful in the initial hour on May 21 to confirm any directional move. Support is visible at 22,400. On the higher end, a sustained move can take the index towards 22,600 and higher in the short term," said Rupak De, senior technical analyst, LKP Securities.
2) As per Technical charts
On the daily chart, the Nifty50 index formed a small Doji candle on May 18, indicating indecision among traders. The index, however, stayed above the 20-Day EMA, suggesting ongoing strength in the market. Immediate support is seen at 22,380, while resistance is positioned at 22,650, said Om Mehra, technical analyst, SAMCO Securities.
Nagaraj Shetti, senior technical research analyst of HDFC Securities added: A Bullish candlestick pattern -- Piercing line -- was formed on the Nifty weekly chart, which indicates more upside for the market ahead.
"Larger range bound pattern of around 22,800-21,750 came into play last week. Having moved up from near the lower range of 21,750 levels, the Nifty is expected to move towards the upper range of 22,800 levels over the next weeks. Immediate support is placed at 22,200 levels," he said.
As for Bank Nifty, Om Mehra of SAMCO Securities said the Bank Nifty index has held above the crucial 48,000 mark for the past two trading sessions, signaling a positive momentum.
"Additionally, the MACD indicator on the daily timeframe is turning upwards, indicating overall strength. The immediate support is observed at 47,800, while resistance is positioned at 48,500 followed by 48,600," he added.
Stocks to Watch on May 21, 2024:
Earnings today: BHEL, NMDC, Eris Lifesciences Ltd, Metropolis Health, JK Tyre, PI Industries, Hitachi Energy (Q1), GE T&D, Ircon, Maharashtra Seamless, Aether Industries, Sheela Foam, Galaxy Surfactants, Rategain, Laxmi Organic, Arvind Fashions, Gulf Oil Lubricants, VA Tech Wabag, Greenply, Dollar Industries, Fiem Industries, Mayur Uniquoters, Action Construction and Godawari Power are the companies scheduled to report their earnings on Tuesday, May 21, 2024.
Oil India: OIL's Q4FY24 net profit rose 18 per cent year-on-year (Y-o-Y) to Rs 2,332.94 crore in Q4FY24 on the back of higher crude oil prices. The state-owned oil and gas producer's Board has recommended issue of bonus shares in the ratio of 1:2.
RITES: The railway company signed a contract with Bangladesh Railways to supply 200 broad-gauge passenger carriages.
Patel Engineering: It saw an 83 per cent Y-o-Y jump in Q4FY24 net profit at Rs 141 crore. The company's revenue increased 11.5 per cent Y-o-Y to Rs 1,343 crore.