Market traded with sharp profit booking on higher levels of Wednesday, adding to selling pressure due to weak global cues. Nifty closed below 10,500 which shows losing grip in bulls. Nifty managed to close at 10,305.30, shedding 165.70 points. Reality, FMCG stocks closed on a positive note, but private banks, media and pharmaceutical stocks closed in the red zone. Nifty Bank closed at 21,426.80, slipping 838.10 points from the previous day’s closing.
As per monthly option data, handful of call writing on higher strikes ranging from 10,400 to 10,600 is seen which shows Nifty might witness resistance in subzone of 10,500. This might act as resistance as maximum call OI is placed here after 10,500. But Nifty is likely to take support at 10,300 as maximum put OI stands here after 10,000. We might witness strength only if Nifty breaks level of 10,500. Therefore, traders should try to create short position keeping close eye on 10,500, as it might act as a resistance for this monthly expiry.
We can see a big momentum in following stocks:
Buy: Affle (India) (Above Rs 1,560)
Target: Rs 1,720
Stop loss: Rs 1,490
The stock has taken support at its key moving average and has formed a bullish flag pattern. More thrust might be witnessed if the stock somehow breaks the level of 1,560. Further, it is witnessing resistance breakout, which might lead the stock to witness more upward movement. Considering the technical evidence, we recommend buying the stock above Rs 1,560 for the target of Rs 1,720, keeping a stop loss at Rs 1,490 on closing basis.
Buy: Hexaware Technologies Limited (Above Rs 330)
Target: Rs 365
Stop loss: Rs 310
The stock took support of its important moving average on daily charts and is forming bullish flag. Further, it is witnessing resistance breakout from 330, which might lead the stock to witness more upward movement. We recommend buying the stock above Rs 330 for the target of Rs 365, keeping a stop loss at Rs 310 on closing basis.
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Disclaimer: Gaurav Garg is Head of Research at CapitalVia Global Research Limited- Investment Advisor. The analyst does not hold position in any of the stocks mentioned above. Views are personal.