Nifty strength only above 9,000 level: CapitalVia Global Research

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

Market witnessed sharp profit booking at higher level; Nifty facing stiff resistance at 9,200

Indian market traded with negative sentiments in second half of Wednesday's session due to weaker global cues, which triggered selling pressure in broader indices. Nifty managed to close at 8,925.30, slashing 68.55 points. FMCG, realty and media sectors traded with positive sentiments whereas financial services and private banks closed in the red. Nifty bank closed at 19,057, slashing 431 points from the previous day’s closing.
 

As per the weekly option data, handful of call writing on higher strikes ranging from 9,000 to 9,500 is seen, which shows Nifty would face stiff resistance in sub 9,200 zone. The level of 8,500 will act as support as maximum put open interest (OI) is placed here. But the Nifty is likely to face stiff resistance at 9,000 as maximum call OI is placed here. We can witness strength only if Nifty breaks the level of 9,000. Therefore, traders should try to create short position keeping a close eye on 9,000.
 

We can see a big momentum in following stocks: 

Buy: Mindtree Limited (Above Rs 788) 

Target: Rs 835

Stop loss: Rs 750

The stock is witnessing a reversal from lower levels of 750. Further buying momentum would be witnessed if the stock moves above 788. Breakout from 788 would lead to the stock witnessing more upward movement. Considering the technical evidence discussed above, we recommend buying the stock above Rs 788 for the target of Rs 835, keeping a stop loss at Rs 750 on a closing basis.

Buy: PVR Limited (Above Rs 1,107)

Target: Rs 1,180

Stop loss: Rs 1,065

The stock is forming a reversal pattern on daily charts along with RSI-indicator witnessing positive divergence in daily charts. A breakout from its resistance placed at 1,107 would lead the stock to witness more upward movement. We recommend buying the stock above 1,107 for the target of Rs 1,180, keeping a stop loss at Rs 1,065 on a closing basis.

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