Chandan Taparia suggests Nifty strategy; bets on Cummins, Indian Bank

Chandan Taparia of Motilal Oswal decodes how to trade Nifty and Bank Nifty today; here are stock bets and strategy

Nifty outlook: 

Nifty index opened flattish and immediately witnessed buying from lower levels and improved sentiment throughout the session to cross the 25,750 zone. It witnessed some volatile moves in the second half of the session but managed to close above 25,700 zones with bulls supporting the index at every small dip. It formed a bullish candle on the daily frame and has now started to form higher highs from the last two sessions. Now it has to hold above 25,650 zones for an upside move towards 25,850, then 26,000 zones, while supports are placed at 25,600, then 25,500 zones.

 

 

On the option front, Maximum Call OI is at 26,000 then 26,200 strike, while Maximum Put OI is at 25,500 then 25,600 strike. Call writing is seen at 26,200, then 26,000 strike, while Put writing is seen at 25,700 then 25,600 strike. Option data suggests a broader trading range in between 25,300 to 26,200 zones, while an immediate range is between 25,500 to 26,000 levels.

Nifty Bank strategy:

Bank Nifty index opened on a negative note and drifted towards the 60,600 zone in the initial hour of the session. However strong recovery was seen from lower levels towards the 61,250 zone in the latter part of the session. It formed a bullish candle on the daily scale with a long lower shadow as buying interest is visible at lower levels. It has relatively outperformed the benchmark index and is taking support near its 10 DEMA. Now it has to hold above 61,000 zone for an up move towards 61,500, then 61,765 marks, while on the downside support is seen at 61,000 then 60,750 zones.

Stocks to Buy today: Recommendation by Chandan Taparia of Motilal Oswal Financial Services

Buy CUMMINSIND CMP: ₹4,597, Stop-loss: ₹4,440, Target: ₹4,900

 

The Cummins India stock has broken out from a consolidation zone on the daily chart with a strong bodied bullish candle and high traded volumes. The RSI indicator is rising, which confirms the uptrend.

Buy INDIANB CMP: ₹920, Stop-loss: ₹889, Target: ₹978

The Indian Bank stock has given a trendline breakout on the daily chart and is respecting its 50 DEMA, suggesting a strong uptrend. The MACD indicator is rising to confirm the up move.             

Buy SUPREMEIND CMP: ₹3,920, Stop-loss: ₹3,765, Target: ₹4,245

The Supreme Industries stock has formed a “Bullish Rounding Bottom” pattern on the daily chart, suggesting the start of an uptrend. The ADX line is risng which confirms the strength of the uptrend.   

 

(Disclaimer: This article is by Chandan Taparia, head derivatives & technicals, wealth management, Motilal Oswal Financial Services. Views expressed are his own.)