Nifty, Bank Nifty outlook; Bajaj Auto, Canara Bank among top stock picks

Bank Nifty has to hold above 59,000 zones for a bounce towards 59,500 then 59,750 zones while on the downside support is seen at 58,750 then 58,500 levels

Nifty index opened flattish and after slipping below 25,900 zones, it made attempts of recovery above 25,950 levels. It failed to hold at higher zones and witnessed a tug of war between the bulls and bears within a range of 100 points for the entire session and finally closed near its opening levels. It formed a doji sort of a candle on the daily frame with longer lower shadow indicating support based buying but has been making lower highs – lower lows from the last three sessions which is signalling lack of follow up buying. Now it has to cross and hold above 26,000 zones for strength to regain towards 26,150 and 26,250 zones while supports can be seen at 25,850 then 25,700 zones 

 

On option front, Maximum Call OI is at 26,000 then 26,300 strike while Maximum Put OI is at 26,000 then 25,900 strike. Call writing is seen at 26,000 then 26,300 strike while Put writing is seen at 25,900 then 26,000 strike. Option data suggests a broader trading range in between 25,500 to 26,300 zones while an immediate range between 25,700 to 26,100 levels. 

 

Bank Nifty index opened on a negative note and drifted lower towards 58,750 zones in the initial hour of the session. However quick recovery was seen from lower zones and it gradually extended the momentum towards 59,250 levels. It formed a bullish candle on daily candle as buying interest is visible at lower zones and it negated the formation of lower highs after three sessions. It is hovering near its 20 DEMA and is relatively outperforming the benchmark Index. Now it has to hold above 59,000 zones for a bounce towards 59,500 then 59,750 zones while on the downside support is seen at 58,750 then 58,500 levels. 

Buy Canara Bank (CANBK) | CMP: ₹154 | Stop-loss: ₹148 | Target: ₹166

Canara Bank stock is in an overall uptrend and is respecting its 20 DEMA support zones with slight dips being bought into. The ADX line is rising which confirms the strength of the uptrend.

Buy Jindal Stainless (JSL) | CMP: ₹836 | Stop-loss: ₹818 | Target: ₹870

Jindal Stainless stock has broken out of a consolidation zone on the daily chart with a massive bullish candle and a surge in traded volumes. The MACD line is rising which confirms the bullish trend. 

Buy Bajaj Auto (BAJAJ AUTO) | CMP: ₹9,282 | Stop-loss: ₹9,000 | Target: ₹9,750

Bajaj Auto stock has given a breakout form a “Symmetrical Triangle” pattern on the daily chart. Buying was visible across the Auto space which may support the up move. The RSI indicator which confirms the up move.

(Disclaimer: This article is by Chandan Taparia, head derivatives & technicals, wealth management, Motilal Oswal Financial Services. Views expressed are his own.)