Trade Setup For April 23: Market Bullish As Higher Highs, Higher Lows Signal Further Upside

The market displayed a bullish sentiment, characterised by a formation of higher highs and higher lows, indicative of a trending day with potential for further upside movement. Major call writing activities were concentrated at the 22,600 strike price. Despite a rising tide that lifted all boats, it was the capital market stocks that particularly stood out, demonstrating notable strength amid the broader market rally.

Bulls continued to dominate the market as the Nifty gained for the second consecutive session. The trend has turned positive after reclaiming a critical near-term moving average, according to Rupak De, senior technical analyst at LKP Securities.

"Sentiment is expected to remain favourable for bulls as long as it stays above 22,150. On the upside, the index could potentially move towards 22,600-22,700. Conversely, a drop below 22,150 could lead to consolidation in the index," De said.

Overseas investors turned net sellers after a day on Monday. Foreign portfolio investors offloaded stocks worth Rs 2,915.2 crore, according to provisional data from the National Stock Exchange.

Domestic institutional investors turned net buyers after a day and mopped up equities worth Rs 3,542.9 crore, the NSE data showed.

Foreign institutions have been net buyers of Rs 6,412 crore worth of Indian equities so far in 2024, according to data from the National Securities Depository Ltd., updated till the previous trading day.

India's benchmark stock indices ended higher for the second straight session on Monday, led by gains in shares of ICICI Bank Ltd., Larsen & Toubro Ltd., and Infosys Ltd.

The NSE Nifty 50 settled 189.40 points or 0.86%, higher at 22,336.40, and the S&P BSE Sensex gained 560.29 points or 0.77%, to end at 73,648.62.

Intraday, the NSE Nifty 50 rose 1.03% to 22,375.65, and the S&P BSE Sensex rose 0.93% to 73,767.80.

• Reliance Industries: Reliance Industries Ltd.'s net profit and revenue for the fourth quarter of fiscal 2024 rose. Net profit for the Mukesh Ambani-led conglomerate rose 8.2% sequentially to Rs 21,243 crore for the January-March period, as compared with a Bloomberg estimate of Rs 19,726.9 crore.

• Reliance Retail: Reliance Retail Ventures Ltd.’s fourth quarter revenue increased, led by store expansion and higher footfalls. The net profit of India's biggest retailer rose 11.7% over the previous year to Rs 2,698 crore in the quarter-ended March, according to an exchange filing by its parent company, Reliance Industries Ltd.

• Patel Engineering: The board approved the opening of the QIP issue at a floor price of Rs 59.5 per share, which is a 10% discount to the current market price. The company may offer a discount of up to 5% on floor price.

• Maintains 'sell' rating and cuts the target price to Rs 2,865 from Rs 2,910 apiece.

• Management had guided for a 50–100-basis-point improvement at the start of FY24 and ended at 50 bps decline.

• Second consecutive quarter of decline of top client segment.

• "One of the investor pushbacks we get is that the stock continues to deliver on growth relatively vs. other peers."

• Consensus was modelling in 100-basis-point margin improvement in FY25 going into Q4 while management indicated similar margins in FY25 vs FY24.

• "We think there could be substantial downgrades to consensus estimates."

• Nuvama maintains 'buy' on Reliance Industries Ltd., raises target price by 10% to Rs 3,500 apiece.

• Ebitda beat the brokerage estimate by 2.5%.

• O2C/Gas beat brokerage estimates by 12%/5%. Retail a miss by 8%.

• RIL smartly moving up the new energy ladder by bagging several PLIs.

• New energy rollout to unleash the next leg of growth.

• Raises FY26 Ebitda by 8% on strong outlook.

Markets in the Asia-Pacific region rose for the second day in a row on Tuesday ahead of the release of business figures around the globe, and in anticipation of positive earnings from big tech giants. Hong Kong's Hang Seng gained the most by nearly 2%.

US stocks rebounded on Monday, with corporate America kicking off the busiest week for first-quarter earnings that will be key in shaping the outlook for equities, reported Bloomberg.

The S&P 500 Index and the Nasdaq Composite rose 0.87% and 1.11%, respectively, as of Tuesday. The Dow Jones Industrial Average rose 0.67%.

The Brent crude rose 0.39% at $87.34 per barrel. Gold was down by 0.69% at 2,311.20 an ounce.

The Indian rupee closed stronger on Monday after weakening of the US Dollar Index and Brent crude.

The local currency strengthened by 10 paise to close at Rs 83.37 against the US dollar, after opening at Rs 83.40. It closed at Rs 83.47 in comparison with the US dollar on Friday, according to Bloomberg data.