Markets witnessed heavy sell-off as budget failed to cheer D-street; Indices fell more than 2.5 per cent
Market traded with volatility on Saturday and saw a sharp sell-off and closed at its critical 200-day EMA. Market closed at 11,661.90 with a huge drop of 300 points. Bank Nifty cracked more than 3.2 per cent and closed at 29,820.90. Realty, media and financial services stocks traded with negative sentiments through the day whereas, IT stocks witnessed some helping hand on Saturday’s special budget day session.
As per weekly option data, handful of call writing on higher strikes ranging from 11,800 to 12,200 is observed which shows Nifty is witnessing strong resistance in the sub-11,800 zones. Market should hold 11,650 for any relief as 200-day EMA stands at 11,664. Otherwise, we can see level of 11,500 in this week. Market is likely to trade in range of 11,600 to 11,800 until 11,800 level is breached, as it holds highest call OI in this weekly series. Traders should try to book profits at higher levels keeping close eye on 11,800. However, if Nifty trades below 11,600 then we can see downside movement to 11,500.
We can see a big momentum in following stocks:
Buy: Hindustan Unilever (Above Rs 2,086)
Target: Rs 2166
Stop loss: Rs 2030
The stock is sustaining on major moving averages in daily chart and witnessing a bounce back from its important moving averages, breaching this level could result in good upside momentum.
Considering the technical evidence discussed above, we recommend buying the stock above 2086 for the target of Rs 2166, keeping a stop loss at Rs 2030 on closing basis.
Buy: Tata Elxsi (Above Rs 960)
Target: Rs 995
Stop loss: Rs 940
Stock is trading above major resistance level in daily charts, stock is forming a bullish flag pattern and any gain from the levels of 960can lead to a bullish movement. We recommend buying the stock at 960 for the target of Rs 995, keeping a stop loss at Rs 940 on closing basis.
Disclaimer: The author is Head of Research at CapitalVia Global Research Limited- Investment Advisor. The analyst does not hold position in any of the stocks mentioned above.