As per the options data, the support and resistance levels for the Nifty has shifted higher in the August series compared to last expiry.
Abhishek Mondal
Guiness Securities
On Tuesday, bulls woke up late afternoon and helped the benchmarks hit fresh record highs. After a sluggish start to the day, the Nifty gained momentum and closed at 11,356.50, forming a bullish candle on the daily charts.
Market sentiment remained upbeat from the second half of the trading session after the government sought Parliament's approval for additional gross additional expenditure of Rs 11,697.92 crore for the current fiscal.
Some support also came in on reports that corporate India’s Business Optimism Index for the July-September quarter registered an 11.7 percent increase over last year.
The Nifty is continuously making higher highs and lows for the eight consecutive sessions and is trading above 11,171.55 (100 percent retracement levels of January to March downfall), which indicates that the index has the potential to move higher around 11,505 levels (127 percent retracement of the January-to-March downfall), with an immediate support at 11,171.55 and 11,057 (20-day exponential moving average).
The 14-day relative strength index (RSI) is trading at 76.75, and has now entered the overbought zone but is still showing upward movement. The moving average convergence divergence (MACD) is trading above the zero line with a positive crossover, which indicates that the bias could remain positive in the short term. The volatility index ended 0.83 percent lower at 12.48. A decrease in VIX suggests limited downside and a consolidated upmove in the market.
On the options front, maximum call open interest of 28.93 lakh contracts is seen at 11,500 strike, followed by 11,400 strike which now holds 25.33 lakh contracts. Maximum put OI of 47.69 lakh contracts is seen at 11,000 strike, followed by 11,200 strike which now holds 30.65 lakh contracts.
As per the options data, the support and resistance levels for the Nifty has shifted higher in the August series compared to last expiry. Immediate support is seen around 11,200 and 11,000 levels, whereas 11,400 and 11,500 will act as an immediate hurdle in this expiry.
Here is a list of top three stocks that could return 4-15% in the next 1-2 months:
Puravankara Ltd: Buy| Close: Rs 105.75 | Target: Rs 122 | Stop Loss: Rs 95 | Return: 15.37%
The stock has given a breakout from symmetrical triangle pattern around Rs 102-103 on the daily chart with higher volumes.
A daily momentum indicator Relative Strength index (RSI) reading at 51.35 level, showing positive momentum and MACD trading below zero line with positive crossover whereas OBV — On Balance Volume is showing an upward momentum and (+) DI just crossover (-) DI, which indicates that the stock has the potential to move higher.
Traders can buy the stock in the range of Rs 104-106 with a stop loss below Rs 95 (closing) for a target of Rs 122
Mahindra & Mahindra Ltd: Buy| Close: Rs 935.95 | Target: Rs 974 | Stop Loss: Rs 910 | Return: 4.07%
On the daily chart, the stock has been trading in an ascending triangle formation where it has recently taken a support of its lower trend line and bounce with moderate volumes.
Moreover, the stock has been continuously trading above its 21-days moving average which is placed at 915.70 levels which shows a positive trend of the stock.
A daily momentum indicator Relative Strength index (RSI) showing positive momentum and MACD trading above zero line with positive crossover.
Based on the above technical structure, we are expecting an upside movement in the counter in few trading sessions so, traders can buy the stock in the range of Rs 933-936 with a stop loss below Rs 910 (closing) for a target of Rs 974
Container Corporation of India Ltd: Buy| Close: Rs 669.30 | Target: Rs 712 | Stop Loss: Rs 640 | Return: 7.58%
The stock has given a break-out above its downward trend line around 665-666 levels on Tuesday with moderate volumes on the daily chart which suggest bullishness in the stock.
A daily momentum indicator Relative Strength index (RSI) reading at 57.97 level, showing positive momentum and MACD trading around zero line with positive crossover whereas (+) DI trading above the (-) DI and OBV — On Balance Volume is showing an upward momentum, which indicates limited downside for the stock.
Traders can buy the stock in the range of Rs 667-670 with a stop loss below Rs 640 (closing) for a target of Rs 720
Disclaimer: The author is Research Analyst, Guiness Securities. The views and investment tips expressed by investment experts on Moneycontrol are his own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.