Nifty outlook and top trading ideas by CapitalVia: Buy HDFC, Equitas

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

Market traded lower on Friday; Nifty facing stiff resistance at 12,000

Market traded with negative sentiments on Friday as it witnessed profit booking on higher levels despite strong global cues. Nifty closed at 11,914.40 shedding 54 points. Media, metals and automobile stocks traded with positive sentiments through the day and gained most among indices. Nifty Bank closed at 31,111.60, losing 238.40 points from the previous day’s closing.
 

As per weekly options data, a handful of Put unwinding on strikes ranging from 11,900 to 12,100 shows Nifty is witnessing weakening support in the zone of sub-11,950. Call writing on higher strikes ranging of 11,900 to 12,100 shows market is likely to face resistance at higher levels.
 

Traders should try to book profits at higher levels, as market has maximum call OI at 12,000 which will act as major resistance levels for the weekly expiry, but 11,900 will act as support as maximum OI for the puts stands here. 
 

However, if somehow, Nifty manages to breach the level of 11,900, it will lead to sell-off which opens risk of correction up to 11,750. Therefore, traders should be cautious and should sell on higher levels and on every spike keeping close eye on 12,000. But, if somehow Nifty manages to breakout above 12,000, we can expect fast short covering.

We can see a big momentum in following stocks: 

Buy HDFC Ltd.: (Above Rs 2,242)

Target: Rs 2,312

Stop loss: Rs 2,198

The stock is witnessing flag breakout from the levels in daily chart. Moreover, it is witnessing resistance breakout from the level of 2,242 and breaching this level will result in good upside momentum. Considering the technical evidence discussed above, we recommend buying the stock above Rs 2,242 for the target of Rs 2,312, keeping a stop loss at Rs 2,198 on closing basis.

Buy Equitas Holdings (Above Rs 91.50)

Target: Rs 98.20

Stop loss: Rs 87.80

After consolidating in a narrow range, the stock is ready to witness resistance breakout from level of 91.20 and further from the levels of 91.50 will lead to a bullish movement. We recommend buying the stock at 91.50 for the target of Rs 98.20, keeping a stop loss at Rs 87.80 on closing basis.

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