Nifty view & top trading ideas by CapitalVia: Buy Pidilite Ind, Sun Pharma

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

Sit tight and Stay Cautious: Be Selective for coming trading sessions

Indian equity benchmarks marched towards new highs for the second consecutive trading session because of HDFC Bank Ltd. which crossed Rs 7 lakh crore in market capitalization. Nine out of 11 sectoral gauges compiled by NSE ended higher as on Wednesday closing. 

In the coming trading session today, we are expecting positive movements in metal and IT stocks because of easing trade tensions between major global economies. The central GST collection fell short of the budget estimate by nearly 40 per cent during April-November period of FY20 which is denting the Government’s intentions for an expansionary fiscal policy to stimulate growth. The focus will be more on revenue realization, but the government may not prefer rate hikes to compensate for the revenue gap because it is going to further hurt the overall consumer sentiments.

The battle between Bulls and Bears will be defined by the outcome of GST Council meeting which in real terms will affect the overall consumer sentiments. Bears are now out of market, but bulls are writing more puts to stay away from adverse situations. From monthly OI distribution chart we are expecting the market sentiments to be positive by Index draggers for the coming trading session on Thursday.
 

We can see a potential big momentum in following stocks: 
 

Buy: Pidilite Industries (above Rs 1,374)
 

Target:  Rs 1,420
 

Stop loss:  Rs 1,350
 

The stock is showing a breakout in daily chart; resistance breakout from the levels of 1374 might bring momentum to the stock and the stock is trading above its 200 day EMA. Considering the technical evidence discussed above, we recommend buying the stock above 1374 for the target of Rs 1420, keeping a stop loss at Rs 1350 on closing basis.
 

Buy: Sun Pharmaceutical Industries Ltd (Above Rs 444)
 

Target: Rs 467
 

Stop loss: Rs 425
 

The stock is trading above all important moving averages, after consolidating in a narrow range stock has given breakout and if the stock will break the most immediate resistance of 444 it might lead to a bullish movement. We recommend buying the stock at 444 for the target of Rs 467, keeping a stop loss at Rs 425 on closing basis.

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