Indices moves higher with the help of short-covering; Nifty closed above 9,000
Market traded in a close range on Wednesday but witnessed a sharp short-covering move in the last hour, which pushed Nifty above 9,000. The index managed to close at 9,066.55, adding 187.65 points. All sectoral indices closed on a positive note, but pharma, auto and financials stocks surged the most. Nifty bank closed at 17,840.20, adding 353.95 points from the previous day’s closing.
As per the weekly option data, handful of put writing on lower strikes ranging from 8,800 to 9,000 is seen which shows that Nifty would witness firm support in sub 9,000 zone. The level of 9,000 will act as support as maximum put open interest (OI) is placed here after 8,800. But Nifty is likely to face stiff resistance at 9,300 as maximum call OI is placed here. We can witness strength only if Nifty breaks level of 9,300. Therefore, traders should try to create long position keeping close eye on 9,000, as it might act as a base for weekly expiry.
We can see a big momentum in following stocks:
Buy: Tata Consultancy Services Limited (Above Rs.1,967)
Target: Rs 2,050
Stop loss: Rs 1,927
The stock is witnessing a reversal pattern on daily charts and bounced from its important moving average. Further, the stock is witnessing resistance breakout from 1,967 which might lead the stock to witness more upward movement. Considering the technical evidence discussed, we recommend buying the stock above 1,967 for the target of 2,050, keeping a stop loss at 1,927 on a closing basis.
Buy: Sun Pharmaceutical Industries Limited (Above Rs.460)
Target: Rs 502
Stop loss: Rs 430
The stock is witnessing a reversal pattern on daily charts. Further, the stock is taking support from its important moving average. Breakout from its resistance levels of 458 would lead the stock to witness more upward movement. We recommend buying the stock above 460 for the target of 502, keeping a stop loss at 430 on a closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.