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We can witness short covering if Nifty breaches 11,800: Gaurav Garg

Nifty could face firm support in sub 11,600-zone.11,600 will act as support as maximum put OI is placed here

Topics
Stock calls | Nifty Outlook | Market technicals

Gaurav Garg  |  Mumbai 

As per weekly option data, handful of put writing on lower strikes ranging from 11,500 to 11,700 is witnessed
As per weekly option data, handful of put writing on lower strikes ranging from 11,500 to 11,700 is witnessed

Market trade higher ahead of weekly expiry, Nifty likely to face resistance at 11,800

The stock market traded with strength through-out the day on Wednesday amidst weaker global cues after US President Donald Trump called-off stimulus package till elections. Nifty closed above 11,700 and is the immediate support to watch out for. The index managed to close at 11,738.85 after adding 76.50 points. Auto, banking sector traded with positive sentiments whereas media, metal and reality sector closed in red mark. Nifty bank closed at 22,964.80, adding 111.10 points from the previous day's closing.

As per weekly option data, handful of put writing on lower strikes ranging from 11,500 to 11,700 is witnessed which shows that Nifty could face firm support in sub 11,600-zone.11,600 will act as support as maximum put OI is placed here. We can witness short covering move along with addition of fresh position only if Nifty breaches 11,800. Therefore, traders should try to create long position keeping close eye on 11,600.

We can see a big momentum in following stocks:

Buy Apollo Hospitals Enterprise Limited (Above Rs 2,190)

Target: Rs 2,295

Stop loss: Rs 2,120

The stock is witnessing a breakout from its bullish flag pattern. Further buying momentum would be witnessed if stock moves above 2,190. Breakout from the level of 2,190, which is immediate resistance, might lead stock higher. The stock is sustaining above important average. Considering the technical evidence, we recommend buying the stock above Rs 2,190 for the target of Rs 2,295, keeping a stop loss at Rs 2,120 on closing basis.

Buy PNB Housing Finance Limited (Above Rs 353.20)

Target: Rs371.50

Stop loss: Rs332

The stock is forming a reversal pattern on daily charts. Breakout from the level of 353 would lead stock to witness more upward movement. It is witnessing bounce from the important 40-DEMA. We recommend buying the stock above Rs 353.20 for the target of Rs 371.50, keeping a stop loss at Rs 332 on closing basis.

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Disclaimer: Gaurav Garg is Head of Research at CapitalVia Global Research Limited- Investment Advisor. The analyst may or may not not hold position in any of the stocks mentioned above. Views expressed are personal.

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First Published: Thu, October 08 2020. 07:57 IST
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