Nifty outlook and top trading ideas by CapitalVia: Buy Eicher Motors, ITC

Technical Calls by Gaurav Garg, Head of Research at CapitalVia Global Research Limited- Investment Advisor

Nifty managed to hold 11,300 level amid weekly expiry and weaker global scenario; all eyes on Friday as RBI to announce monetary policy 
 

Markets traded with higher volatility on Thursday, weaker global cues made adverse impact on the market but somehow the index managed to hold 11,250 and managed to close at 11,314.00 shading 45.90 points. Media and realty stocks traded with positive sentiments throughout the day, but metal and banks especially private banks showed weakness which dragged markets down. Niftybank closed at 28,414.10 that is 311.40 points lower from the previous day’s closing.
 

As per monthly option data, Put writing was seen on strikes ranging from 11,000 to 11,400 which shows Nifty is likely to take support in sub-11,200 zone. Call writing on higher strikes shows there will be congestion above 11,400, where Nifty may face resistance. Traders should continue keeping positive bias as market is trading above 200-day and 50-day EMA stands in the zones of 11,250 and Put OI is at 11,300 which will act as major support. 11,500 will act as stiff resistance. However, if somehow Nifty breaks down below the level of 11,250 it might lead to a downside movement up to 10,075 levels. 
 

We can see a big momentum in the following stocks: 
 

Buy ITC above Rs 262.50
 

Target: Rs 277.50
 

Stop loss: Rs 249.50
 

The stock is showing signals of reversal from lower zones and a resistance breakout from the levels of Rs 262.50. As the stock is making resistance breakout in daily charts, the stock is trading at its 50-day EMA and a breakout will result in good upside momentum.
 

Considering the technical evidence discussed above, we recommend buying the stock above Rs 262.50 for the target of Rs 277.50, keeping a stop loss at Rs 249.50 on closing basis.
 

Buy Eicher Motors above Rs. 18,350
 

Target: Rs 19,500
 

Stop loss: Rs 17,500
 

The stock is trading above all important moving averages, after consolidating in a narrow range the stock has given a breakout from the resistance from 18,250 levels and a further strength from the levels of 18,350 will lead to a bullish movement. We recommend buying the stock at Rs 18,350 for the target of Rs 19,500, keeping a stop loss at Rs 17,500 on closing basis.

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Disclaimer: The analyst does not hold position in any of the stocks mentioned above.