Nifty needs to hold 11,100 for further upside: CapitalVia Global Research

We can witness short-covering move along with the addition of fresh position only if the Nifty breaches 11,200 level.

The market traded with mixed sentiments on Wednesday and witnessed range bound movement ahead of RBI’s MPC meeting outcome due on Thursday; volatility index came lower by 1.29% which shows some relief to bulls as volatility is likely to come down. 

Nifty managed to close at 11,101.70 adding 6.40 points. Rupee remained weak and closed at 75.0100. Metal, Auto, and media sectors traded with positive sentiments whereas pharma and PSU banks sectors closed with marginal loss. Nifty Bank closed at 21,510 adding 19.50 points from the previous day’s closing.

As per weekly options data, a handful of put writing on lower strikes ranging from 11,000 to 11,200 have been witnessed which shows Nifty would face firm support in the sub 11,000 zone. 11,000 will act as support as maximum put OI is placed here. We can witness short-covering move along with the addition of fresh position only if the Nifty breaches the level of 11,200. Therefore, traders should try to create a long position keeping a close eye on 11,000. 

We can see a big momentum in the following stocks: 

Buy Bharti Airtel Limited (Above Rs 562): 

Target:  Rs 586

Stop loss:  Rs 545

The stock is witnessing reversal from lower levels of Rs 545. Further buying momentum would be witnessed if the stock moves above Rs 562. Breakout from the level of Rs 562, which is its immediate resistance, might lead to stock higher.

Considering the technical evidence discussed above, we recommend buying the stock above Rs 562 for the target of Rs 586, keeping a stop loss at Rs 545 on a closing basis.

Buy Mahanagar Gas Limited (Above Rs 993):

Target: Rs 1,035

Stop loss: Rs 970

The stock is forming a reversal pattern on the daily charts. It is showing signs of oversold on the RSI indicator. Breakout from the level of 390 would lead the stock to witness more upward movement. We recommend buying the stock above Rs 993 for the target of Rs 1,035, keeping a stop loss at Rs 970 on a closing basis.

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