Grueling optimism of Market towards newer highs driven by RIL and Pharma stocks – Time to stay cautious
The Nifty traded near the important resistance level of 12,000 on Wednesday and if it is able to sustain above this level in the coming trading sessions, it will set the path towards a newer high surpassing the previous high of 12,103. Reliance Industries (RIL),and pharma stocks traded with positive sentiments throughout the day and gained most among indices. Nifty bank closed flat at 31,341 as compared to its opening of 31,340. If we look at crude oil prices, it has come down sharply over the last two trading sessions because of surge in US inventory.
From option chain we can observe that maximum put open interest was seen at 11,900 followed by 11,800 strike, while maximum Call open interest was seen at 12,000 followed by 12,200 strike. For this week, we can expect a range-bound movement of market and some profit booking in PSU bank stocks and pharma stocks.
In the current market scenario, we see some upside movement in the following stocks:
Buy TCS: (Above Rs. 2,140)
Target: Rs 2,190
Stop loss: Rs 2,090
The stock is showing signals of reversal from lower zones, with the support of 200 EMA. Breaking the immediate resistance of 2,140 will bring an upside momentum in the stock. Considering the technical evidence discussed above, we recommend buying the stock above RS 2,140 for the target of Rs 2,190, keeping a stop loss at Rs 2,090 on a closing basis.
Buy Pidilite Industries Limited: (Above Rs 1,334)
Target: Rs 1,420
Stop loss: Rs 1,280
The stock is showing signals of reversal from lower zones, with the support of 200 EMA. Breaking the immediate resistance of 1,334 will bring an upside momentum in the stock. Considering the technical evidence discussed above, we recommend buying the stock above Rs 1,334 for the target of Rs 1420, keeping a stop loss at Rs 1,280 on a closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.