Nifty outlook and top trading ideas by CapitalVia Global Research

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

Markets traded with positive sentiments on Wednesday as bulls took charge; Nifty settled above 12,100

The markets opened with gap-up and traded with positive note and remained range bound throughout the session on Wednesday with higher volatility which pushed Nifty above 12,100. The index closed above its 50-day EMA at 12,129.50, adding 73.70 points. FMCG, Metal and Auto stocks traded with positive sentiments through the day whereas, pharma stocks witnessed some pressure. Nifty bank closed at 30,877, adding 115.60 points from the previous day’s closing.

As per weekly option data, handful of put writing on lower strikes ranging from 12,000 to 12,150 is observed which shows Nifty is witnessing strong support in the sub-12,100 zones. Market is likely to trade in the range of 12,100 to 12,200 until 12,200 level is breached, as it holds highest call OI in January monthly series. Traders should try to buy on dips, keeping a close eye on 12,100 level as it holds second highest put OI for the weekly expiry after 12,000 strike. However, if the Nifty is able to breach the level of 12,200, it might lead to short covering move up to 12,280. 

We can see a big momentum in following stocks: 

Buy: Asian Paints Limited (Above Rs 1,806)

Target:  Rs 1,855

Stop loss:  Rs 1,773

The stock is sustaining on major moving averages on the daily chart and witnessing a bounce back from its important moving averages. Breaching this level could result in good upside momentum for the stock.

Considering the technical evidence discussed above, we recommend buying the stock above Rs 1,806 for the target of Rs 1,855, keeping a stop loss at Rs 1,773 on a closing basis.

Buy: Bharti Infratel (Above Rs 247)

Target: Rs 262

Stop loss: Rs 238

The stock is trading above major resistance levels on daily charts. It is forming a bullish flag pattern and any rise from the levels of 247 can lead to a bullish movement. We recommend buying the stock at Rs 247 for the target of Rs 262, keeping a stop loss at Rs 238 on a closing basis.

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