Top stock picks by CapitalVia: Buy Shriram Transport Finance, HDFC Life

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

Indices traded in close range ahead of weekly expiry; Nifty defends 9,200

Market traded with sideways sentiments through-out the session on Wednesday but banking stocks helped indices settle in the green. Nifty managed to close at 9,270.90, adding 65.30 points. Private banks and financial stocks traded with positive sentiments whereas FMCG and PSU banking sector closed in the red. Nifty bank closed at 19,685.75, adding 422.70 points from the previous day’s closing.
 

As per weekly option data, handful of put writing on lower strikes ranging from 9,000 to 9,200 is seen which shows Nifty would witness firm support in sub 9,200 zone. The level of 9,000 will act as support as maximum put open interest (OI) is placed here. But Nifty is likely to face stiff resistance at 9,600 as maximum call OI is placed here after 9,500. We can witness strength only if Nifty breaks level of 9,200. Therefore, traders should try to create long position keeping close eye on 9,200.

We can see a big momentum in following stocks: 

BUY: Shriram Transport Finance Company Limited (Above Rs 800)

Target: Rs 880

Stop loss: Rs 755

The stock is witnessing a reversal pattern on daily charts. Further, the stock is taking support from its important moving average. Breakout from its resistance levels of 800 would lead the stock to witness more upward movement. Considering the technical evidence discussed, we recommend buying the stock above 800 for the target of 880, keeping a stop loss at 755 on a closing basis.

Buy: HDFC Life Limited (Above Rs 500)

Target: Rs 550

Stop loss: Rs 470

The stock is forming a bullish flag pattern on daily charts and is bouncing from its important moving average placed at 480. Breakout from its resistance placed at 500 would lead the stock to witness more upward movement. We recommend buying the stock above 500 for the target of 550, keeping a stop loss at 470 on a closing basis.

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