Nifty outlook and stock picks by Gaurav Garg: Buy Mindtree, CESC

Market traded with huge volatility on Wednesday, and recovered smartly from intra-day lows of 12,983.90. The Nifty index closed above its key support placed at 13,000. Nifty Bank was in pressure as it closed with more than 1 per cent decline. Nifty closed at 13,113.80, adding 4.80 points. Metal, auto and realty traded with positive sentiments, whereas banking and financial stocks closed with red mark. Nifty bank closed at 29,463.20, down 354.60 points from the previous day's closing.

As per weekly option data, heavy put writing on lower strikes, ranging from 12,800 to 13,050, is witnessed which shows Nifty might face support in the zone of 13,000 as maximum put OI is placed here for the weekly expiry. We can witness short-covering move along with addition of fresh position only if Nifty breaches 13.200. Therefore, traders should try to create long position keeping close eye on 13,000.
 

We can see a big momentum in following stocks:
 

Buy MindTree Limited (Above Rs 1,427):
 

Target: Rs 1,482
 

Stop loss: Rs 1,389
 

The stock is witnessing a resistance breakout from its immediate resistance level placed at 1427. Further buying momentum would be witnessed if the stock moves above 1,427. Also, it is trading above its important moving averages. We recommend buying the stock above 1,427 for the target of Rs 1,482, keeping a stop loss at Rs 1,427 on closing basis.
 

Buy CESC Limited (Above Rs 606):

Target: Rs 642
 

Stop loss: Rs 587

The stock is witnessing a breakout from its bullish flag pattern. Further buying momentum might be witnessed if it moves above 606. Breakout from the level of 606, which is immediate resistance, might lead the stock to trade higher. It is also sustaining above its important moving averages. We recommend buying the stock above 606 for the target of Rs 642, keeping a stop loss at Rs 587 on closing basis.

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Disclaimer: Gaurav Garg is Head of Research at CapitalVia Global Research Limited- Investment Advisor. The analyst does not hold position in any of the stocks mentioned above. Views expressed are personal.