Market witnessed sharp pull-back on Wednesday, Nifty regained 8,000 mark
Markets traded with a positive sentiment on Wednesday and witnessed strong short-covering move along with fresh long positions. Volatility index came lower by 7.89 per cent which shows some relief to bulls as volatility is likely to come down. The Street is expecting stimulus package from the government. Nifty managed to close at 8,317.85, adding 516.80 points. Financial services, private banks, auto sector traded with positive sentiments but none of the sectors closed in the red. Nifty bank closed at 18,481, adding 1,373.10 points from the previous day’s closing.
As per the weekly option data, handful of put writing on lower strikes ranging from 8,000 to 8,200 is seen which shows Nifty would face firm support in sub 8,000 zones. 8,000 will act as support as maximum put OI is placed here after 7,500. We can witness short-covering move along with addition of fresh position only if Nifty is able to breach 8,500. Therefore, traders should try to create long position keeping a close eye on 8,000.
We can see a big momentum in following stocks:
Buy TCS limited (Above Rs 1,750)
Target: Rs 1,880
Stop loss: Rs 1,680
The stock is witnessing reversal from lower levels of Rs 1,700. Further buying momentum would be witnessed if the stock moves above 1,750. Breakout from 1,750 would lead the stock to witness more upward movement. Considering the technical evidence discussed, we recommend buying the stock above 1,750 for the target of Rs 1,880, keeping a stop loss at Rs 1,680 on a closing basis.
Buy Hindustan Unilever Limited (Above Rs 2,100)
Target: Rs 2,270
Stop loss: Rs 1,980
The stock is forming a reversal pattern on daily charts along with forming inverted hammer candlestick on weekly candle. Breakout from 2,100 would lead the stock to witness more upward movement. We recommend buying the stock above 2,100 for the target of Rs 2,270, keeping a stop loss at Rs 1,980 on a closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.