Trade Setup for February 3: Nifty eyes 23,670 resistance

The NSE Nifty 50 ended the day slightly lower by 0.11%, falling by 26.25 points to close at 23,481.15, while the Sensex gained marginally by 0.01%, up 5.39 points, to settle at 77,505.96 on Saturday.

For February 3, Nifty is facing resistance around the 23,670 level. Immediate support levels for Nifty are seen in the range of 23,400–23,350, with a key downside zone identified at 23,100.After a volatile session on Union Budget Day, the Nifty 50 index faces a crucial test for direction. On February 1, the index experienced a roller-coaster ride, initially rising, only to face heightened volatility as Finance Minister Nirmala Sitharaman delivered her speech. Despite these fluctuations, the market saw a recovery toward the end of the session, closing with minor losses.

The Nifty ended its three-week losing streak, climbing more than 1.5%, buoyed by positive domestic factors, including upbeat earnings and measures by the RBI to support liquidity.

Sector Performance:

Consumption stocks surged, with the Nifty FMCG and Tourism sectors leading the gains, driven by Budget-related consumption boosts.

In contrast, sectors related to capital expenditure, such as Defence, PSU, and Capital Goods, faced significant losses, with declines over 3%.

Auto stocks saw a rally, boosted by a proposed tax rebate, with Nifty Auto up 2%.

Looking ahead, the Union Budget's influence will likely remain in the short term. However, market participants are also turning their focus to corporate earnings and the RBI’s upcoming Monetary Policy Committee (MPC) meeting, where any signs of further monetary support will be crucial. Key earnings announcements from companies such as Bharti Airtel, ITC, Titan, Hero MotoCorp, and M&M will also draw attention.

Technical Outlook: Nagaraj Shetti from HDFC Securities noted that the underlying trend for the Nifty remains positive. However, resistance looms near the 23,500–23,600 levels. A decisive move above this range could push the index toward the 24,000 mark. Immediate support lies at 23,300, and a break below this level could trigger panic in the market.

Rupak De from LKP Securities observed indecision in the market, as reflected by a small-bodied candle on the daily chart. The Nifty has support at 23,280, and staying above this could keep the trend positive. On the upside, the index may target 23,700–24,000, while a fall below 23,280 would signal potential downside risk.

Key Levels to Watch:

Immediate support: 23,300–23,280

Key resistance: 23,700–24,000

Technical support zones: 23,400–23,350 (20 DEMA), 23,100–22,800 (major support)

Resistance levels: 23,670–23,700 (50 DEMA), 23,800–24,000 (Falling Wedge upper band)

Stocks to Watch:

Jewellery Stocks: New tariff lines effective from May 1 based on precious metal content.

Eicher Motors: Sales of Royal Enfield up 19.6% to 91,132 units.

MOIL: Production up 17% in January; price hike for manganese ore.

Aarti Industries: Net profit down 63%, revenue up 6.2%.

Coal India: January production down 0.8%; year-to-date production at 74% of target.

Anant Raj: Net profit up 55%, revenue up 36.3%.

GR Infra: Profit up 7.8%, revenue down 20.6%.

Neogen Chemicals: Net profit at ₹10 crore, up 900%, revenue up 22.5%.

Hero MotoCorp: January sales up 2%, exports surge.

Lupin: USFDA inspection at Somerset facility concludes with zero observations.

Happiest Minds: To acquire Gavs Technologies' Middle East businesses for $1.7 million.

As we head into the next trading session, the market will likely remain influenced by both domestic and global cues, with corporate earnings and the RBI's policy review shaping investor sentiment. Keep an eye on key technical levels and market reactions to earnings and global developments.