Nifty Outlook & top trading ideas by CapitalVia: Buy Apollo Hospitals, M&M

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

Markets showed spectacular performance after 6-day losing streak ; PSU and private banks shines, Nifty regained its 200-EMA 
 

Markets recovered from lows smartly and traded with positive bias throughout the session despite weaker global cues, SBI’s slashing of interest rates on CASA and FD’s added flavor in today’s action. Nifty bounced from the critical levels of 11,080 and managed to close at 11,313.30 adding 186.90 points. Banks, finance stocks traded with positive sentiments throughout the day, and gained most among indices. IT stocks were weak as dollar slipped. Nifty bank outperformed and gave closed at 28,785.80 gaining 1018.25 points higher from the previous day’s closing.
 

As per monthly option data, Put writing on strikes ranging from 11,000 to 11,300 which shows Nifty likely to take support in sub-11200 zone. Call unwinding on higher strike shows bears losing their grip on higher levels ranging from 11,400 to 11,600. 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 11,180 will led to downside movement up to 11,075 levels. 
 

We can see a big momentum in following stocks: 
 

Buy Apollo Hospitals above Rs 1,433:
 

Target:  Rs 1,475
 

Stop loss:  Rs 1,399
 

The stock is showing signals of reversal from lower zones, resistance breakout from the levels of rs 1,433 and as stock is making resistance breakout in daily charts, stock is trading at its 50-day EMA and 200-EMA and breakout will result in good upside momentum.
 

Considering the technical evidence discussed above, we recommend buying the stock above Rs 1,433 for the target of Rs 1475, keeping a stop loss at Rs 1,399 on closing basis.
 

Buy Mahindra and Mahindra above Rs 580:
 

Target: Rs 615
 

Stop loss: Rs 550
 

The stock is trading above all important moving averages, after consolidating in a narrow range stock has given breakout from the resistance from Rs 578 levels and further strength from the levels of Rs 580 will lead to a bullish movement. We recommend buying the stock at Rs 580 for the target of Rs 615, keeping a stop loss at Rs 550 on closing basis.

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