Top trading ideas by CapitalVia Global Research: Buy SBI, Varun Beverages

SBI's stock has formed a bullish flag pattern

Nifty traded with positive sentiments on firm global cues; Likely to face resistance at 10,500
 

Markets traded with positive sentiment on Wednesday on firm global cues. Banking and financial stocks rallied sharply, gaining momentum through short-covering which helped the index post a close above 10,400, which looks promising for the bulls. Nifty managed to close at 10,430, adding 127.90 points. Private Banks, PSU Banks and financial stocks closed on a positive note, whereas realty and Pharmaceutical stocks closed in the red. Nifty bank closed at 21,977.60, adding 498.65 points from the previous day’s closing.

As per the weekly option data, handful of put writing on lower strikes ranging from 10,300 to 10,400 is seen, which shows that the Nifty might witness support in subzone of 10,300, and also might act as support as maximum put open interest (OI) is placed here after 10,300. But, the index is likely to take resistance at 10,500 as maximum call OI stands here. We might witness further strength only if Nifty breaks the level of 10,500. Therefore, traders should try to create short position keeping a close eye on 10,500, as it might act as a resistance for weekly expiry.
 

We can see a big momentum in following stocks: 

Buy: State Bank of India (Above Rs.185.50)

Target:  Rs 196

Stop loss:  Rs 178

The stock has taken support at its key moving average and has formed a bullish flag pattern and more thrust might be witnessed if the stock somehow breaks the level of 185.50. Further, the stock is witnessing resistance breakout which might lead the stock to witness more upward movement. Considering the technical evidence discussed, we recommend buying the stock above 185.50 for the target of 196, keeping a stop loss at 178 on a closing basis.
 

Buy: Varun Beverages Limited (Above Rs.700)

Target: Rs 745

Stop loss: Rs 670

The stock took support from its important moving average and is forming a bullish flag pattern. Further, the stock might witness resistance breakout from the level of 700 which might lead the stock to witness more upward movement. We recommend buying the stock above 700 for the target of 745, keeping a stop loss at 670 on a closing basis.

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