Nifty Outlook and top trading ideas by CapitalVia Global Research Limited

Nifty is able to breach the level of 11,800, it will lead to sell-off which will open the risk of correction up to 11,650

Market witnessed profit booking on Friday; Nifty slipped from psychological level of 12,000

After Moody’s downgrade of outlook from “stable” to “negative” on economy of India, there was a sharp profit booking from 12,000 levels in later half of trading session on Friday. Nifty closed at 11,908.15 shedding 103.90 points. Realty, banking especially private banks traded with positive sentiments throughout the day and gained the most among indices. Nifty bank closed at 30,749.40 adding 116.20 points positive from the previous day’s closing. As per weekly option data, handful of Put unwinding on strikes ranging from 11,900 to 12,000 was there, which shows Nifty is witnessing weakening support in the zone of 11,900. Call writing on higher strikes ranging of 12,000 to 12,200 shows market 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 week, but 11,800 will act as support as maximum OI for the puts stands here. However, if Nifty is able to breach the level of 11,800, it will lead to sell-off which will open risk of correction up to 11,650. Therefore, traders should be cautious and should sell on higher levels every spike keeping close eye on 12,100. 

Stock calls

Buy Grasim ltd: (Above Rs 802)

Target: Rs 870

Stop loss: Rs 765

After consolidating in a narrow range stock has formed a bullish flag pattern and has given breakout from level and further strength from the levels of 800 will lead to a bullish movement. We recommend buying the stock at 802 for the target of Rs 870, keeping a stop loss at Rs 765 on closing basis.

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