Nifty outlook and top stock picks by CapitalVia Global Research

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

Market traded lower on Friday on AGR verdict; Bank Nifty fall more than 1.25 per cent

Market ended lower for the second consecutive day as the Supreme Court's adjusted gross revenue (AGR) verdict over telecos was announced on Friday. Traders also turned cautious ahead of the weekend on uncertainty over coronavirus. Nifty closed at 12,113.50, shedding 61.20 points. All the major indices traded lower. PSU banks, FMCG and private bank stocks traded with negative sentiments throughout the day. Nifty bank closed at 30,834.80 shedding 395.45 points from the previous day’s closing.

As per weekly option data, huge call writing on higher strikes ranging from 12,200 to 12,400 is seen which shows Nifty is witnessing stiff resistance in sub-12,250 zones. Traders should try and create short position at any higher levels as maximum call OI is at 12,200 which will act as stiff resistance level for weekly expiry. But 12,000 will act as support level as maximum OI for the puts stands here. However, if Nifty is able to breach 12,200, it can lead to short covering move up to 12,300.

We can see a big momentum in following stocks: 

Buy: Multi Commodity Exchange of India Limited (Above Rs 1,281)

Target: Rs 1,335

Stop loss: Rs 1,254

The stock is sustaining on major moving averages on daily charts. More bullish movement can be seen if the stock breaches 1,280 level. Along with this, the stock is also witnessing moving average crossover which will further strengthen bullish movement.

Considering the technical evidence discussed above, we recommend buying the stock above Rs 1,281 for the target of Rs 1,335, keeping a stop loss at Rs 1,254 on a closing basis.

Buy: Tata Global Beverages Limited (Above Rs 400.50)

Target: Rs 425

Stop loss: Rs 385

After consolidating in a narrow range, the stock is ready to witness resistance breakout from the psychological level of 400. The stock is trading above its important moving averages. We recommend buying the stock above Rs 400.50 for the target of Rs 425, keeping a stop loss at Rs 385 on a closing basis.

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