 "Stock picks from Shubham Agarwal of Motilal Oswal Research")
Nifty Outlook
Nifty is yet to witness any exhaustion of the ongoing bullish trend. The sequence of gaps would be complete once an Exhaustion gap is witnessed on the daily scale. The momentum oscillator has cooled off but is yet to see an overbought situation. Hence the odds remain in favor of continuation of the ongoing bullish trend with an immediate support placed below the ‘Run Away Gap’ at 7680 which now serves as a trail stop for longs
Reco: BUY
Last Close: Rs 2478
Target : Rs 2760
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Bajaj Auto saw a rebound from its long term support. Positive sector outlook , fresh breakout from the consolidation and pull back to support point indicates momentum to accelerate in the coming weeks. Bajaj Auto could be accumulated with a stop at Rs 2400 for a potential pattern target upto Rs 2760.
Reco: Buy
Last Close: Rs 267
Target : Rs 300
Breakout from the immediate consolidation with significant volumes. The breakout is now followed by the continuation pattern indicating the uptrend to remain intact. Petronet LNG could be accumulated for a target upto 300 with a stop at 254
Reco: Sell
Last Close: Rs 1056
Target : Rs 980
Negative sector outlook & occurrence of a 'Dark Cloud Cover' candlestick formation at the retracement resistance zone indicates termination of the ongoing pullback. The setup provides a phenomenal reward to risk opportunity for fresh shorts with a stop above 1097 for a short term target upto 980.
Option Strategy: Maruti (Call Butterfly Spread)
Buy 1 Lot 3900 CE; Sell 2 Lots 4100 CE; Buy 1 Lot 4300 CE
Target Profit : 12000 Stop Loss : 3900
Positive sector outlook along with significant incremental change in open interest E-O-E augur well for up move;
Option indicative band shows immediate resistance at 4000 and support at 3500; Considering stable volatility and positive outlook, OTM Call Butterfly spread is recommended
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