Indices rallied due to short-covering ahead of monthly expiry; Nifty managed to cross 9,300
Market traded with positive sentiment on Wednesday and witnessed sharp short-covering in financial and banking stocks. Nifty managed to close above 9,300. It ended at 9,314.95, adding 285.90 points. Financials, private banks, and IT indices closed on a positive note, but Pharma and media stocks closed in the red. Nifty bank closed at 18,710.50, adding 995.92 points from the previous day’s closing.
As per the weekly option data, handful of put writing on higher strikes ranging from 9,000 to 9,300 is seen which shows Nifty would witness support in sub 9,200 zone. The level of 9,000 will act as support as maximum put open interest (OI) is placed here. But, the Nifty is likely to face stiff resistance at 9,300 as maximum call OI is placed here after 9,500. We can witness strength only if Nifty breaks level of 9,300. Therefore, traders should try to create long position keeping a close eye on 9,200, as it might act as a base for weekly expiry.
We can see a big momentum in following stocks:
Buy: HDFC Bank Limited (Above Rs 904)
Target: Rs 960
Stop loss: Rs 875
The stock is witnessing reversal pattern on the daily charts and it has also bounced from its important moving averages. Further, it is witnessing resistance breakout from 904, which might lead the stock to witness more upward movement. Considering the technical evidence discussed, we recommend buying the stock above 904 for the target of 960, keeping a stop loss at 875 on a closing basis.
Buy: HDFC Limited (Above Rs.1,580)
Target: Rs 1,680
Stop loss: Rs 1,535
The stock is trading at the major support zone on daily charts. Further, it is taking support from its important moving average. Breakout from its resistance levels of 1,580 would lead the stock to witness more upward movement. We recommend buying the stock above 1,580 for the target of 1,680, keeping a stop loss at 1,535 on a closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.
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