Markets started this week with a massive sell-off due to weaker automobile sales along with weak GDP data. On Wednesday, however, market saw smart recovery from lows and managed to close with marginal gains of 46.80 points at 10,844.70. Niftybank showed more strength with gains of 1.12 percent at 27,123.80. As per option data, huge put writing was witnessed on lower strikes ranging from 10,700 to 10,800 which will act as support for the this truncated weekly expiry. We can witness resistance on higher end at 10,900 and 11,000 as highest OI stand on these strikes. We should keep a positive bias on Nifty and any dip will be an opportunity for the traders keeping 10,750 as a base.
Buy BPCL: above Rs 367
Target: Rs 393
Stop loss: Rs 342
The stock is showing signs of a probable resistance breakout above the levels of Rs 367 and given breakout from bullish flag pattern on daily charts, stock is trading near its 200-day EMA and a breakout will result in good upside momentum.
Considering the technical evidence discussed above, we recommend buying the stock above 367 for the target of Rs 393, keeping a stop loss at Rs 342 on closing basis.
Sell Britannia Industries Ltd. futures: Rs 2,625
Target: Rs 2,525
Stop loss: Rs 2,700
The stock is trading below all important moving averages. After consolidating in a narrow range, the stock has given a breakdown from the support at 2,650 levels and further weakness from the levels of 2,625 will lead to a bearish movement. We recommend selling the stock at 2,625 for the target of Rs 2,525, keeping a stop loss at Rs 2,700 on closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.