The last trading of August witnessed a smart recovery from intraday low of 10,874.80 and settled in the green at 11,023.25, gaining 74.95 points ahead of announcements made by the Finance Minister Nirmala Sitharaman on Friday evening.
All sectors closed on a positive note comprising Pharma, fast moving consumer goods (FMCG) and metals sector showing the highest bullish sentiment. Banks underperformed and their benchmark index Nifty Bank closed at 27,427.85, gaining less than half a per cent.
As per option data, huge put writing is evident on lower strikes ranging from 10,800 to 11,000 which will act as support for the September series. We can witness resistance on higher end at 11,200 and 11,100 as highest OI (open interest) stand on these strikes. We should keep a positive bias on Nifty and any dip will be an opportunity for the traders, keeping 10,800 as a base.
Buy Aurobindo Pharma: above Rs 607.20
Target: Rs 652
Stop loss: Rs 580
The stock has shown reversal from the lower levels and formed a bullish flag pattern on daily charts. It is trading near its 50-day exponential moving average (EMA) and a breakout will result in good upside momentum.
Considering the technical evidence discussed above, we recommend buying the stock above Rs 607.20 for a target of Rs 652, keeping a stop loss at Rs 580 on closing basis.
Buy Torrent Pharmaceutical: Rs 1,720
Target: Rs 1,825
Stop loss: Rs 1,650
The stock is trading above all important moving averages and after consolidating in a narrow range, it seems ready to give resistance breakout above Rs 1,720 which will lead to a strong bullish movement. We recommend buying the stock at Rs 1,720 for a target of Rs 1,825, keeping a stop loss at Rs 1,650 on closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.