Nifty outlook and top trading ideas by CapitalVia: Buy Canara Bank, BoB

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

Market traded in range ahead of weekly expiry; Buy every dip keeping keen eye at 11,500
 

Markets traded higher on Wednesday on firm global cues. Markets traded in the narrow range of 11,600 to 11,700 ahead of expiry. Nifty managed to hold 11,600 which will act as crucial support for the next trading session. Nifty closed at 11,604.10 adding 15.70 points. Automobiles, PSU banks and IT stocks traded with positive sentiments throughout the day and gained most among indices. Nifty bank closed at 29,459.60 adding 48.40 points positive from the previous day’s closing.
 

As per monthly option data, handful of Put writing on strikes ranging from 11,500 and 11,600 which shows that Nifty is likely to take support in this zone. Call unwinding on lower strikes shows weakening of resistance on lower levels ranging from 11,300 to 11,500. But call writers were active on higher strikes of 11,650 and 11,700 which will be resistance ahead of weekly expiry. Traders should continue keeping a positive bias towards the market as put OI is at 11,500 and 11,600 which will act as major support levels for the month, but 11,700 will act as stiff resistance as maximum OI for the calls stands here. However, if somehow Nifty breaches the level of 11,700, it will lead to short covering move up to 11,850 levels. Therefore, traders should keep a positive bias and should buy at every dip keeping close eye on 11,500. 
 

We can see a big momentum in PSU banks stocks: 
 

Buy Bank of Baroda above Rs 93.20 
 

Target:  Rs 98.50
 

Stop loss:  Rs 89.00
 

The stock is showing signals of reversal from lower zones and signs of a resistance breakout from the levels of 92.60. As the stock makes a resistance breakout in daily charts and gives a closing above the resistance level, breaching this level will result in good upside momentum.
 

Considering the technical evidence discussed above, we recommend buying the stock above 93.20 for the target of Rs 98.50, keeping a stop loss at Rs 89.00 on closing basis.
 

Buy Canara Bank above Rs 195.40
 

Target: Rs 210
 

Stop loss: Rs 186
 

After consolidating in a narrow range, the stock has given a breakout from the resistance from 195 levels and is showing further strength from the levels of 195.40. This will lead to a bullish movement. We recommend buying the stock at 195.40 for the target of Rs 210, keeping a stop loss at Rs 186 on closing basis.

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