Day trading guide: Nifty has immediate support at 12,500-12,460 zone

Amit Trivedi, YES Securities

Volatile session ended above 11,750 as after opening on a gap up note, Nifty erased early gains and entered in negative territory. However, the momentum yet again started picking up as it sustained above levels of 11,600-mark. Eventually forming another bullish candle, Nifty settled near the day's high. Shifting base higher, now the immediate support stands near the 12,500-12,460 zone.

Nifty breadth was positive with 47 out of Nifty50 constituents settling in the green. Moreover, most of the sectoral indices except PSU Bank index ended in the green.

Bank Nifty recouped day’s losses to settle above 28,800. However, internal breadth of the Bank Nifty components turned negative, suggesting profit taking in selected stocks.

India Vix gained for the straight session, reclaiming levels of 22. Nifty's put strike 12,700 and 12,600 shows significant open interest addition, while 12,800 call holds second highest OI base. Hence, price action near 12,800 needs to be closely watched out.

Equity recommendation
Buy Exide industries near Rs 163

• Stop loss: Rs 157
• Target: Rs 175
• After breaching downward slanting trend line resistance, since the past few days, the stock is holding ground above Rs 160. Sustenance above short-term averages along with daily RSI hovering above levels of 50 could eventually lift the stock higher till Rs 175 zone.

Future recommendation
Buy Godrej CP (Consumer Products) November future near Rs 685-687

• Stop loss: Rs 660
• Target: Rs 745
• Post 14% decline from the October high, the stock found support near the 655-650 zone. On the weekly chart, the stock is bouncing off its 50 week EMA, while daily momentum indicators are bouncing off the support zone.

Option recommendation
Buy IOC (Indian Oil Corporation) November 85 strike call option near 2.40-2.20

• Stop loss: 1
• Target: 4
• Reversal from the multi-month support zone eventually broke short-term hurdle levels. Shifting range higher, on-going positive momentum in the stock is likely to continue towards the 88-90 zone.

(Amit Trivedi is CMT, Technical Analyst - Institutional Equities, YES Securities)