Market traded with a negative sentiment and closed below its 200-day EMA on Wednesday, ahead of weekly futures and options contract expiry. The index closed at 11,271.30 with a closing below 11,300 for the first time since May. Financials, auto, metal and pharma stocks were in the most pain during the session. Foreign Institutional Investors (FIIs) sold $1.20 billion in July month and remained mute due to recent announcement regarding FPI’s tax norms.
As per Option data, Nifty has witnessed put unwinding at 11,300 strike and fresh call writing on 11,300 which clearly suggests shifting on base, and it will be difficult to cross this level. Now, key resistance stands at 11,300 followed by 11,350 and support level stands at 11,200. BankNifty is near its critical 200 EMA at 28,850 and it managed to close at 28952.30 shading 175.80 points.
For the coming week, we can see a potential big movement in media stocks and metals will be under pressure.
Buy Zee Entertainment Ltd (Above Rs 380)
Target: Rs 405
Stop loss: Rs 362
The stock was in narrow consolidation range for the last few months and has given a breakout. The level above 380 would result in MACD bullish crossover on the daily charts. Moving average and Oscillator setup is bullish on the short- and medium-term charts.
Considering the technical evidence discussed above, we recommend buying the stock above Rs 380 for a target of Rs 405, keeping a stop loss at Rs 362 on a closing basis.
Sell Tata Steel (Below Rs 441):
Target: Rs 410
Stop loss: Rs 463
The stock has remained under pressure in the recent past and is trading below all important moving averages. Considering the technical analysis for this stock, we recommend selling the stock below Rs 441 for a target of Rs 410, keeping a stop loss at Rs 463 on closing basis.
Disclaimer: The analyst may have positions any any or all of the above mentioned stocks.