How to trade Nifty? Chandan Taparia picks these three stocks to buy today

Nifty trading strategy: The Nifty index has encountered profit booking during the initial half hour, leading to a decline towards the 24,500 zone; Check strategy, stock picks

Nifty share price:

The Nifty index commenced the session on a positive note, opening at 24,780 levels. However, it encountered profit booking during the initial half hour, leading to a decline towards the 24,500 zone. Subsequently, the index staged a brief recovery but faced renewed selling pressure near the 24,600 mark. It ultimately settled with a loss of approximately 180 points, closing below its key support at the 20 DEMA. Now till it holds below 24,650 zones it can see more profit booking towards 24,400 then 24,200 zones while hurdles are seen at 24,750 then 24,850 zones.

 

On the option front, Maximum Call OI is at 25,000 then 25,500 strike while Maximum Put OI is at 24,600 then 24,500 strike. Call writing is seen at 24,600 then 25,000 strike while Put writing is seen at 24,300 then 24,550 strike. Option data suggests a broader trading range in between 24,200 to 25,100 zones while an immediate range between 24,300 to 24,800 levels. 

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Bank Nifty share price:

Bank Nifty index opened gap up at new life high territory near 56,161 marks but failed to hold its opening gains and gradually drifted lower toward 55,450 zones at latter part of the session. It formed a Bearish candle on the daily scale as some profit booking was seen from higher levels but holding well above its 20 DEMA as the bigger trend of the index is positive with multiple supports intact at lower levels. Now it has to hold above 55,500 zones for an upmove towards 56,000 and then 56,161 levels while on the downside support is seen at 55,250 then 55,000 zones.

Stocks to buy today: 

Buy BHARATFORG CMP: ₹1,270, Stop-loss: ₹1,230, Target: ₹1,350

The stock has formed a bullish pole and flag pattern on the daily chart which suggests a continuation of the uptrend. It has surpassed above its 200 DEMA to support the upmove. The ADX line is rising which confirms the strength of the uptrend.

Buy HINDZINC CMP: ₹468, Stop-loss: ₹450, Target: ₹500

Price has broken out of a symmetrical triangle with a surge in volumes to support the up move. The MACD indicator is rising which confirms the bullish momentum.

BUY FEDERALBNK CMP: ₹211, Stop-loss: ₹205, Target: ₹222                                                            

The stock has breached above a cup and handle pattern with higher than average traded volumes. The RSI indicator is positively placed which has bullish implications.  (Disclaimer: This article is by Chandan Taparia, head derivatives & technicals, wealth management, Motilal Oswal Financial Services. Views expressed are his own.)