Nifty outlook and top stock picks by Motilal Oswal Securities

Nifty outlook and top stock picks by Chandan Taparia, Derivatives & Technical Analyst, MOSL.

Nifty outlook and stock picks from Chandan Taparia, Derivatives & Technical Analyst, Motilal Oswal Securities:

Outlook :

Nifty index traded in a range of 50 - 60 points throughout the session and closed near to its 50 DEMA. It managed to close positive after the decline of last five trading sessions and formed a small Bullish candle on the daily scale. However it continued its formation of lower highs – lower lows for last five trading sessions and needs to negate the same to get a short term stability. Now it has to hold above 10550 zones to witness an up move towards 10625 then 10650 levels while on the downside 10480 then 10440 are likely to act as a key support zones.

Stocks:

SRTRANSFIN

Reco: BUY

Last Close: 1453

Stop Loss : 1413

Target : 1530

Trading in rising upward channel, it has given bounce back after retesting of previous trend line breakout. Mechanical indicator given positive crossover.

PIDILITE

Reco: BUY

Last Close: 1118

Stop Loss : 1092

Target : 1055

It is on the verge of pole & flag breakout. RSI witnessed positive crossover with rise in volume.

TATA ELXSI

Reco: BUY

Last Close: 1169.45

Stop Loss : 1135

Target : 1240

On the verge to triangle breakout It is on the verge of pole & flag breakout. RSI moving north ways in all timeframe.

STRATEGY

TECHM – BULL CALL SPREAD +690 CE -710 CE

BUY TECHM 1 LOT OF 690 CALL @ 19.50 

SELL TECHM 1 LOT OF 710 CALL @ 13.50   

NET PREMIUM PAID : 6

KEEP SL OF NET PREMIUM OF 2 POINTS (RISK : Rs. 4800/-)

KEEP TGT OF NET PREMIUM OF 13 POINTS (REWARD : Rs. 8400/-)

Rationale:
 

1.      The stock is making higher top- higher bottom formation on daily scale

2.      Maximum Put OI is at 670 Strike which is acting as a strong support

3.      Call unwinding is seen at 700 strike which could provide scope for  further up move

4.      Thus, suggesting Bull Call Spread to play the positive to range bound move

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