Nifty to face stiff resistance at 9,500 levels: Gaurav Garg of CapitalVia

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

Indices trades lower on weaker global cues; Pharma stocks shine

Market traded with negative sentiments throughout the day on Friday and slashed previous day’s gains. Nifty heavyweight Reliance Industries prevented the index from weakening further. Global markets traded negative. Nifty managed to close at 9,154.50, slashing 159.50 points. Media, realty, and banking sector traded with negative sentiments whereas pharma sector closed in the green. Nifty bank closed at 19,586.55, losing 681.30 points from the previous day’s closing.

As per the weekly option data, handful of call writing on higher strikes ranging from 9,000 to 9,500 is seen which shows Nifty would face stiff resistance in sub 9,500 zone. 9,000 will act as support as maximum put open interest (OI) is placed here. We can witness weakness only if the Nifty breaks the level of 9,000. Therefore, traders should try to create short position keeping a close eye on 9,500. 

We can see a big momentum in following stocks:

BUY: Cipla Ltd (Above Rs. 606)

Target: Rs 640

Stop loss: Rs 580

The stock is witnessing bullish flag pattern on daily charts. Further buying momentum would be witnessed if the stock moves above its resistance at 606. Breakout from 606 would lead the stock to witness more upward movement. Considering the technical evidence discussed, we recommend buying the stock above 606 for the target of 640, keeping a stop loss at 580 on a closing basis.

Buy: Ipca Laboratories Limited (Above Rs 1,630)

Target: Rs 1,705

Stop loss: Rs 1,575

The stock is forming a reversal pattern on daily charts and is bouncing from its important moving averages. Breakout from its resistance placed at 1,630 would lead the stock to witness more upward movement. We recommend buying the stock above 1,630 for the target of 1,705, keeping a stop loss at 1,575 on a closing basis.

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