Market traded lower for sixth consecutive trading session; Nifty needs to hold 11,500
Market traded lower on monthly expiry day as markets traded with high degree of volatility due to weaker global cues over coronavirus. The Nifty closed at 11,633.30, shedding 45.20 points. Media, PSU banks, and IT stocks traded with negative sentiments whereas Pharma and FMCG stocks traded with strength. Nifty bank closed at 30,187, slashing 119.85 points from the previous day’s closing.
As per weekly option data, huge call writing on higher strikes ranging from 11,700 to 11,900 is seen which shows Nifty is witnessing resistance in sub 11,750 zone. Traders should try to buy at any dip as market has maximum put open interest (OI) at 11,500 which will act as major support level for weekly expiry. 11,700 will act as resistance as maximum OI for the calls stands here after 12,000 strike. We can witness short-covering move along with addition of fresh position only if nifty breaches 11,700. Therefore, traders should try to buy at any dip keeping close eye on 11,500.
We can see a big momentum in following stocks:
Buy: NIIT Technologies Limited (Above Rs 1,915)
Target: Rs 1,995
Stop loss: Rs 1,853
The stock is forming a bullish flag pattern in daily charts and thus a resistance breakout from the level of 1,915 would lead to the stock witnessing a bullish movement. Considering the technical evidence discussed, we recommend buying the stock above Rs 1,915 for the target of Rs 1,995, keeping a stop loss at Rs 1,853 on a closing basis.
Buy: SRF Limited (Above Rs 4,172)
Target: Rs 4,275
Stop loss: Rs 4,090
The stock is witnessing resistance breakout from the level of bullish divergence on daily charts, further strength in the stock would result in bullish movement in the stock if it sustains above 4172, Breakout from this level might lead the stock towards its next resistance zone. We recommend buying the stock above Rs 4,172 for the target of Rs 4,275, keeping a stop loss at Rs 4,090 on a closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.