Nifty outlook & stock picks by CapitalVia: Buy Axis Bank, Avenue Supermarts

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

Markets traded higher for the fourth trading session; Nifty looks steady ahead of weekly expiry on Thursday
 

Markets managed to hold 11,400 on Wednesday on firm global cues and, India VIX closed at 16.27, showing cool-off and we can expect steady movement ahead. Nifty closed at 11,464 adding at 35.70 points and managed to hold 11,400 level. IT, pharma and media stocks traded with positive sentiments throughout the day and gained most among indices. Nifty bank remained flat and gave closed at 28,543.40 slashing 11.70 points negative from the previous day’s closing.
 

As per monthly option data, put writing on strikes ranging from 11,300 to 11,500 which shows Nifty likely to take support in sub-11,400 zone. Call unwinding on lower strikes shows weakening of resistance on lower levels ranging from 11,200 to 11,300. Trader should remain positive bias as market is trading above 200-day and 50-day EMA stands in the zones of 11,220 and put OI at 11,000 will act as major support for the month, but 11,500 will act as stiff resistance as maximum OI for the calls stands here.

However, if somehow Nifty breached level of 11,400 will led to downside movement up to 11,280 levels. Traders should keep a positive bias and should buy every dip keeping close eye on 11,500 and try to book profits at this level. 
 

We can see a big momentum in following stocks: 
 

Buy Avenue Supermarts (above Rs 1890)
 

Target: Rs 1,990
 

Stop loss: Rs 1,840
 

The stock is showing signals of reversal from lower zones, resistance breakout from the levels of 1885 and as stock is making resistance breakout in daily charts and gave closing above the resistance level, stock is trading at its 50-day EMA and 200-EMA and breakout will result in good upside momentum. Considering the technical evidence, we recommend buying the stock above 1890 for the target of Rs 1990, keeping a stop loss at Rs 1840 on closing basis.
 

Buy Axis Bank (above Rs 698):
 

Target: Rs 718
 

Stop loss: Rs 681
 

The stock is trading above all important moving averages, after consolidating in a narrow range stock has given breakout from the resistance from 695 levels along with consolidating around 200-EMA and further strength from the levels of 698 will lead to a bullish movement. We recommend buying the stock at 698 for the target of Rs 718, keeping a stop loss at Rs 681 on closing basis.

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