Nifty needs to hold 9,000 for further up move: Gaurav Garg of CapitalVia

Technical Calls by Gaurav Garg, Head of Research at CapitalVia Global Research Limited- Investment Advisor

Market bounced sharply due to strong global cues, Nifty needs to hold 9,000 for further move

Market traded with positive sentiments throughout Thursday's trading session due to strong global cues. India VIX lowered by 4.78 per cent and closed at 49.7, suggesting that volatility is likely to decrease in the near term and bulls might take control on the Street. Nifty managed to close at 9,111.90, adding 363 points. Pharma, automobile, private banks, and metal sectors traded with positive sentiments whereas none of the sector closed in the red. Nifty bank closed at 19,913.60, adding 1,266 points from the previous day’s closing.
 

As per weekly option data, huge put writing on lower strikes ranging from 8,900 to 9,100 is seen which shows Nifty might take support in sub 9,000 zone. 9,100 will act as support as maximum put open interest (OI) is placed here. But, the index is likely to face stiff resistance at 9,200 as maximum call OI is placed here. We can witness further strength only if Nifty breaks level of 9,200. Therefore, traders should try to create long position keeping close eye on 9,000.
 

We can see a big momentum in following stocks: 

Buy: Piramal Enterprises Limited (Above Rs 985)

Target: Rs 1,135

Stop loss: Rs 890

The stock is forming a bullish flag pattern on the daily charts. Further buying momentum would be witnessed if the stock moves above its resistance of 985. Breakout from 985 would lead to the stock witnessing more upward movement. Considering the technical evidence discussed, we recommend buying the stock above Rs 985 for the target of Rs 1,135, with a stop loss at Rs 890 on a closing basis.
 

Buy: Bajaj Finserv Limited (Above Rs 4951)

Target: Rs 5,400

Stop loss: Rs 4,700

The stock is forming a reversal pattern on the daily charts. Breakout from its resistance placed at 4,950 would lead the stock to witness more upward movement. We recommend buying the stock above Rs 4,951 for the target of Rs 5,400, keeping a stop loss at Rs 4,700 on a closing basis.

Disclaimer: The analyst does not hold position in any of the stocks mentioned above.