Nifty outlook & stock picks by Gaurav Garg: Buy HDFC, Datamatics Global

Market traded with bullish sentiments on Wednesday on the back of strong global cues and managed to close higher by 2.19 per cent on strong global cues. India VIX cooled off by more than 6 per cent which shows bulls reclaimed their grip over markets. Nifty closed at 15,245.60 with gain of 326.50 points. Private bank, PSU bank and metal stocks traded with positive sentiments whereas automobile sector closed in the red with marginal lose. Nifty bank closed at 36,368.10, adding 948.40 points from the previous day’s closing.
 

As per weekly option data, heavy put writing on lower strikes ranging from 14,800 to 15,100 is witnessed which shows the Nifty might face support in the zone of 15,000 as maximum put OI is placed here for weekly expiry. We can witness short-covering move along with addition of fresh position only if Nifty breaches 15,250. Therefore, traders should try to create long position keeping a close eye on 15,000.
 

We can see a big momentum in following stocks:
 

Buy HDFC (Above Rs 2,665)
 

Target: Rs 2,840
 

Stop loss: Rs 2,600
 

The stock is forming a base above its critical support level, which is placed at 2,600. The stock might bounce back if it sustains above 2,665. Further, it is also sustaining above its important moving averages. We recommend buying the stock above 2,665 for the target of Rs 2,840, keeping a stop loss at Rs 2,600 on closing basis.
 

Buy Datamatics Global Services Limited (Above Rs 121)

Target: Rs 140

Stop loss: Rs 109

The stock is forming bullish flag pattern on the weekly chart. Further, a breakout from the level of 121 might show good momentum. Also, the stock is sustaining above its important moving averages. It is in a strong up-trend in these volatile markets too. We recommend buying the stock above 121 for the target of Rs 140, keeping a stop loss at Rs 109 on closing basis.

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Disclaimer: Gaurav Garg is Head of Research at CapitalVia Global Research Limited- Investment Advisor. The analyst does not hold position in any of the stocks mentioned above. Views expressed are personal.