Nifty outlook and top stock picks by Motilal Oswal Securities

Nifty outlook and top stock picks by Chandan Taparia, Derivatives & Technical Analyst, MOSL:

Outlook :

Nifty index continued its formation of higher highs for six consecutive session and headed towards 10,400 zones. It formed a bullish candle and closed above its 50 DEMA on daily scale. Now it has to continue to hold above 10,333 zones to extend its move towards 10,440 then 10,480 zones while on the downside supports are seen at 10,276 then 10,222 levels.

Stocks:

BIOCON
Reco: BUY
Last Close: 620
Stop Loss : 605
Target : 650

Higher top – higher bottom on weekly scale and buying interest is seen in the stock. Managed to surpass immediate hurdle of 614 zones.

FEDERAL BANK
Reco: BUY
Last Close: 98
Stop Loss : 95
Target : 104

Consolidation breakout from its 90-98 zones and managed to hold above its 50 DEMA on daily scale.

IRB
Reco: BUY
Last Close: 248
Stop Loss : 242
Target : 260

Pole and Flag pattern in daily scale and higher lows from last eight consecutive sessions.

NIFTY : SHORT STRANGLE :  APRIL SERIES

SELL NIFTY 10,100 PUT
SELL NIFTY 10,700 CALL
NET PREMIUM RECEIVED : 63 POINTS
KEEP SL OF NET PREMIUM OF 126 POINTS
TARGET : ZERO (PROFIT OF NET PREMIUM OF 63 POINTS)
HIGH PROBABLE TIME DECAY BENEFIT TRDAE

RATIONALE :
 

1. Option band signifies the broader trading range in between 10,100 to 10,500 zones

2. Significant Call OI is intact at 10,500 while multiple hurdles seen at 10,440 and 10,525 zones

3. Maximum Put OI is intact at 10,000 followed by 10,200 strike which is likely to arrest decline

4. Thus, suggesting a Short Strangle strategy to get the benefit of time decay and decline in volatility

Disclaimer: The analyst may have positions in any or all the stocks mentioned above.