Nifty outlook and stock recommendation by CapitalVia: Buy Dabur, HUL

As per weekly option data, handful of put writing on lower strikes ranging from 8,800 to 9,200 is seen which shows Nifty would witness firm support in sub 9,000 zone

We can witness weakness only if Nifty breaks level of 9,000

2 min read Last Updated : Apr 23 2020 | 8:03 AM IST

Indices moved sharply as Reliance industries surged more than 10 per cent

Market traded with positive sentiments through-out the day and rallied up to 9,200 led by Nifty’s heavy weight Reliance Industries Limited. Global markets traded positive and traded with strong upside momentum. Nifty managed to close at 9,187.30 adding 205.85 points. Media, FMCG and automobile sector traded with positive sentiments whereas Reality sector closed in red mark. Nifty bank closed at 19,701.80 adding 292.45 points from the previous day’s closing.

As per weekly option data, handful of put writing on lower strikes ranging from 8,800 to 9,200 is seen which shows Nifty would witness firm support in sub 9,000 zone. 9,000 will act as support as maximum put OI is placed here. But Nifty likely to face stiff resistance at 9,500 as maximum call OI is placed here. We can witness weakness only if Nifty breaks level of 9,000. Therefore, traders should try to create long position keeping close eye on 9,000.

We can see a big momentum in following stocks:

BUY Dabur (Above Rs 505):

Target: Rs 535

Stop loss: Rs 485

The stock is witnessing bullish flag pattern in daily charts. Further buying momentum would be witnessed if stock moves above its resistance 505. Breakout from 505 would lead stock to witness more upward movement. Considering the technical evidence discussed above, we recommend buying the stock above 505 for the target of Rs 505, keeping a stop loss at Rs 485 on closing basis.

BUY Hindustan Unilever (Above Rs 2400):

Target: Rs 2550

Stop loss: Rs 2300

The stock is forming a reversal pattern on daily charts along with bouncing from its important moving average. Breakout from its resistance placed at 2400 would lead stock to witness more upward movement. We recommend buying the stock above 2400 for the target of Rs 2550, keeping a stop loss at Rs 2300 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 his own.