Nifty outlook and top trading ideas by CapitalVia: Buy TVS Motors, RIL

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

Ahead of expiry, Market traded lower on Wednesday ahead of expiry; Nifty may test level of 11,700 
 

Market traded with negative sentiments throughout the day on Wednesday on weaker global cues along with a weaker currency. Nifty closed at 11,840.45 shading 73 points. Media, PSU banks traded with red mark throughout the day and were the biggest losers among indices. Nifty bank closed at 30,541.50 losing 574 points from the previous day’s closing.
 

As per weekly option data, handful of Put unwinding on strikes ranging from 11,850 to 12,000 which shows Nifty is witnessing weakening support in the zone of 11,850 which is very important to watch for on Thursday ahead of weekly expiry. Call writing on higher strikes ranging of 11,850 to 12,100 shows market is likely to face resistance at higher levels. Traders should try to book profits at higher levels as market has maximum call OI at 12,000 which will act as major resistance levels for the weekly expiry, but 11,800 will act as support as maximum OI for the puts stands here. 

However, if somehow Nifty is able to breach the level of 11,800, it will lead to sell-off which opens risk of correction up to 11,650. Therefore, traders should be cautious and should sell on higher levels every spike keeping close eye on 12,000.

We recommend buying can see a big momentum in following stocks: 

Buy - TVS Motors ltd. (Above Rs 464.50)

Target:  Rs 494

Stop loss:  Rs 446
 

The stock is witnessing resistance breakout from the levels of 464.50, moreover, it is taking firm support from its important averages and gave closing above the resistance level and breaching this level can result in a good upside momentum.

Considering the technical evidence discussed above, we recommend buying the stock above Rs 464.50 for the target of Rs 494, keeping a stop loss at Rs 446 on closing basis.

Buy - Reliance Industries ltd. (above Rs 1476.20)

Target: Rs 1,575

Stop loss: Rs 1,425
 

After consolidating in a narrow range, stock has formed a bullish flag pattern and has given a breakout from level of 1,475, and further strength from the levels of 1,476.20 will lead to a bullish movement. We recommend buying the stock at Rs 1,476.20 for the target of Rs 1,576, keeping a stop loss at Rs1,425 on closing basis.

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