Top trading ideas by CapitalVia Global Research: Buy HCL Technologies, TCS

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

Nifty View:
 

Market somehow managed to hold the psychological check-post of 11,000 on Wednesday and closed at 11,118.00 after witnessing selling pressure from last two trading sessions. Benchmark index Nifty needs to hold the 11,000 mark for any hope for an upside recovery. Niftybank has tested its major weekly support in the zones of 28,500 -28,900 from where it bounced back and closed at 28,876.00.

As per the Option data, Nifty has witnessed Put writing at 11,000 strike which is a clear support level along with Call unwinding on a majority of out of the money strikes from which we can expect an up move ahead of weekly expiry.
 

In coming week, we can see IT stocks to witness relative outperformance.

Stock recommendation:

BUY HCL Technology (Above Rs 1,035)
 

Target: Rs 1,079.90
 

Stop loss: Rs 999.70
 

The stock was in a consolidation zone for the last few weeks and now it is showing an potential breakout opportunity if it manages to move above 1,035 levels. The level above 1,035 would result in MACD bullish crossover on the daily charts, further strengthen our view. Moving average setup is bullish on the short- and medium-term charts along with divergence in RSI on daily charts, indicating the odds of the breakout. Considering the technical evidence discussed above, we recommend buying the stock above 1,035 for a target of Rs 1080, keeping a stop loss at Rs 1,001 on closing basis.

BUY TCS (above Rs 2,200)
 

Target: Rs 2,288
 

Stop loss:  Rs 2,145
 

The stock is outperforming the sector and market both, leading the whole IT sector. TCS is witnessing major moving average crossover which would result in strong bullish movement. The script is trading above all important moving averages. Considering the technical evidence discussed above, we recommend buying the stock above 2,200 for the target of Rs 2,288 keeping a stop loss at Rs 2,145 on closing basis.

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