The Nifty rose due to short covering on Thursday, as street expected some relief on FPI surcharge and Long-Term Capital Gains (LTCG) tax. Nifty closed at 11,109.70 on Friday, gaining 77.20 points. The sectors that majorly contributed to the gain include private banks, automobiles and financial services. Sharp bounce back from US benchmark indices and weaker crude prices added more confidence among the traders. Market needs to hold the 11,000 level for further upward movement. The 200-day EMA which stands at 11,270 will act as a major hurdle and we may expect some profit booking at this level. As per Option data, Nifty has witnessed Put writing at 11,000 strike along with 10,900 which will act as a support level along with huge call writing at 11,000 which will act as immediate resistance.
In the upcoming week, we may expect major movement in automobiles and FMCG stocks.
Buy Escorts Ltd. (NSE: ESCORTS): Above Rs 497
Target: Rs 525
Stop loss: Rs 475
The stock has formed a reversal pattern on daily charts after taking firm support at 460 level. We can now expect a breakout from the 497 levels. The level above 497 would result in a MACD bullish crossover on the daily charts. Moving average setup is bullish on the short to medium-term charts.
Considering the technical evidence discussed above, we recommend buying the stock above Rs 497 for a target of Rs 525, keeping a stop loss at Rs 475 on closing basis.
Buy United Spirits Ltd. (NSE: MCDOWELL-N): Above Rs 610
Target: Rs 635
Stop loss: Rs 588
Despite markets being volatile in the recent times, the stock is trading in a close range. United Spirits Ltd. is witnessing a major bullish flag breakout that will result in a strong bullish movement. The script is trading above all important moving averages.
Considering the technical evidence discussed above, we recommend buying the stock above Rs 610 for a target of Rs 635, keeping a stop loss at Rs 588 on closing basis.
Disclaimer: The Analyst does not hold positions in any of the stocks mentioned above.