Nifty outlook and top trading ideas by CapitalVia: Buy TCS, HCL Tech

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

Market recovered from lower level; Nifty needs to hold 11,500 for further upside
 

Markets traded with volatility on October 24 but recovered smartly from day’s low of 11,490.75 and Nifty managed to hold 11,500 and this will act as crucial support for the Diwali truncated week. Surprisingly, SBI Q2 results impacted market which in turn helped market to close in the positive territory.
 

As per monthly option data, handful of Put writing on strikes can be seen ranging from 11,450 and 11,600 which shows Nifty likely to take support in this zone. But call writers were active on higher strikes above 11,550; 11,700 will be resistance ahead of weekly expiry. Traders should maintain positive bias towards market as put OI is at 11,500 which will act as major support level for the month, but 11,700 will act as stiff resistance as maximum OI for the calls stands here. However, if Nifty breaches level of 11,650, it will lead to short covering move up to 11,800 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 following stocks: 
 

Buy TCS Ltd above Rs 2130 
 

Target:  Rs 2,185
 

Stop loss:  Rs 2,085
 

The stock is witnessing resistance breakout from the levels of 2125. Moreover, the stock is giving crossover on MACD on daily charts and gave a close 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 2130 for the target of Rs 2185, keeping a stop loss at Rs 2085 on closing basis.
 

Buy HCL Tech Ltd above Rs 1,138
 

Target: Rs 1,188
 

Stop loss: Rs 1,098
 

After consolidating in a narrow range stock has given breakout from the resistance from level and further strength from the levels of 1135 will lead to a bullish movement. We recommend buying the stock at 1138 for a target of Rs 1188, keeping a stop loss at Rs 1098 on closing basis.

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