Market traded higher on Wednesday; Nifty managed to hold 12,200
Market opened with gap-up on Wednesday and managed to trade higher due to strong global cues along with some ease over coronavirus. Nifty traded in a close range and closed at 12,201.20, gaining 93.30 points. FMCG, metal and private bank stocks traded with positive sentiments throughout the day whereas PSU banks and pharma stocks witnessed some pressure. Nifty bank closed at 31,492.90 adding 349.76 points from the previous day’s closing.
As per weekly option data, handful of put writing on lower strikes ranging from 12,000 to 12,200 is seen which shows Nifty is witnessing firm support in the sub -12,150 zones. Traders should try to buy at any dip as market has maximum put Open Interest (OI) at 12,100 which will act as major support for weekly expiry. 12,300 will act as resistance as maximum OI for the calls stands here. We can witness short-covering move along with addition of fresh position only if nifty breaches 12,300. Therefore, traders should try to buy any dip keeping close eye on 12,100.
The stock has bounced from major moving averages and is consolidating near its resistance placed in the zones of 1,250. Breakout from this resistance level might lead to bullish movement. The stock has given inside bar on Wednesday and may witness good buying momentum if it breaches 1,255. Considering the technical evidence discussed above, we recommend buying the stock above Rs 1,255 for the target of Rs 1,285, keeping a stop loss at Rs 1,238 on a closing basis.
After consolidating in a narrow range stock, the stock has given a closing above its resistance level. Further strength would be observed if the stock breaks the level of 1,234. We recommend buying the stock above Rs 1,234 for the target of Rs 1,305, keeping a stop loss at Rs 1,175 on a closing basis.