Day trading guide: Bank Nifty may witness profit booking if it fails to hold 32,000 level

Amit Trivedi, YES Securities

Post two days' pause, the Nifty opened with an upward gap in an uncharted zone. On intraday decline, it defended levels of 14,200 and eventually surpassed levels of 14,300, ending near day’s high. Appearance of a bullish candle with record close ensures a shift of base higher. Levels of 14,100 could turn out as support zones.

Bank Nifty underperformed the benchmark index. Post gap up opening, Bank Nifty failed to cling on to higher levels, which eventually led to minor profit taking. Follow-up action needs to be closely watched out as inability to sustain above 32,000 could attract mild profit taking.

Gaining for the consecutive seventh week, IT index rallied ~7% on weekly close. FMCG index snapped two weeks’ winning streak.

Equity recommendation

Buy Heidelberg Cement near Rs 235-233

• Stop loss: Rs 223
• Target: Rs 257
• The stock has witnessed consolidation breakout on a comparatively higher volume. Positive follow through could continue uptrend.

Index option strategy

Covered put on Bank Nifty

• Sell January future near 32,180-32,200 and Sell 31,500 strike put (expiry 14 Jan) near 140
• Stop loss: 32,660
• Target: 31,500
• Bank Nifty failed to cling on to higher levels, thereby underperforming the benchmark index. Inability to sustain at current levels could attract mild pull back till 31,000-31500 zone.

( Amit Trivedi is CMT, Technical Analyst - Institutional Equities, YES Securities. Views are his own.)