Nifty outlook and three trading ideas by Chandan Taparia of Motilal Oswal

Buy Maruti Suzuki, Escorts and LIC Housing Finance, says Chandan Taparia

Outlook:

Nifty index managed to hold its immediate support of 9,850 and headed towards 9,925 mark. It closed above 9,900 and given a highest daily close in last 15 trading sessions. It formed a Hammer candle with bigger lower shadow which indicates that decline is being bought in the market. It has been respecting to its rising support trend line by connecting the swings lows of 9,075, 9,448 and 9,685 mark. Now it has to cross and hold above 9,928-9,950 zones to witness a fresh move towards 10,020 and 10,050 while on the downside supports are seen at 9,850 and 9,820.

Stocks:

MARUTI SUZUKI

Reco: BUY

Last Close: Rs 7700

Stop Loss: Rs 7580

Target: Rs 7920

It has made an intermediate term double bottom at the support of 7,400 levels with the follow up buying interest. It has been holding well above its falling trend line and giving a confirmed sign of reversal in the stock. The decline from the high at 7,920 is now ending and a new leg of uptrend seems to be resuming.

ESCORTS

Reco: BUY

Last Close: Rs 647

Stop Loss: Rs 630

Target: Rs 700

It has surpassed its immediate hurdle of 633 and closed near to its 50 DEMA. Major trend is positive and recent decline is giving fresh buying opportunity.

LIC HOUSING FINANCE

Reco: BUY

Last Close: Rs 673

Stop Loss: Rs 660

Target: Rs 700

It has bottomed out with the support near to Rs 640 and has given a reversal on daily and weekly chart. Positive sector outlook could now provide the catch-up rally as earlier it underperformed the entire NBFC segment.

Disclaimer: The analyst may have positions in any or all the stocks mentioned above.