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Nifty Outlook and top trading ideas by CapitalVia Global Research Limited

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Markets gains for 6th consecutive trading session; Nifty likely to face resistance at 11,700 for the next week

Markets traded higher on Thursday on firm global cues along with inflow from the FII’s. After six-day rally, markets are likely to face stiff resistance at 11,700. Nifty closed at 11,661.90 adding 75.50 points and managed to hold 11,600 level. Metal, PSU banks and reality stocks traded with positive sentiments throughout the day and gained the most among indices. Nifty Bank closed at 29,120.30 adding 130.85 points positive from the previous day’s closing.

As per monthly option data, Put writing on strikes ranging from 11,500 and 11,600 shows Nifty is likely to take support in this zone. Call unwinding on lower strikes shows weakening of resistance on lower levels ranging from 11,200 to 11,500. Trader should remain positive bias as market as put OI at 11,000 and 11,400 will act as major support levels for the month, but 11,700 will act as stiff resistance as maximum OI for the calls stands here. However, if somehow nifty breached level of 11,500 will led to downside movement up to 11,330 levels. Traders should keep a positive bias and should buy every dip keeping close eye on 11,500 and try to book profits near 11,700-11,780 zone 

Buy Cadila Healthcare ltd. (Above Rs 243): 

Target:  Rs 259

Stop loss:  Rs 229

The stock is showing signals of reversal from lower zones and resistance breakout from the levels of 243. The stock is making resistance breakout in daily charts and gave closing above the resistance level. It is trading at its 50-day EMA breakout will result in good upside momentum.

Considering the technical evidence discussed above, we recommend buying the stock above 243 for the target of Rs 259, keeping a stop loss at Rs 229 on a closing basis.

Buy HDFC Bank Ltd. (above Rs 1,236):

Target: Rs 1,265

Stop loss: Rs 1,212

The stock is trading above all important moving averages. After consolidating in a narrow range, the stock has given a breakout from the resistance from 1,235 levels and further strength from the levels of 1,236 will lead to a bullish movement. We recommend buying the stock at 1,236 for the target of Rs 1,265, keeping a stop loss at Rs 1,212 on closing basis.

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