RIL's stock has bounced from its important moving averages
Indices rallied for third consecutive day; Nifty closed above 9,500
Market traded with positive sentiments on Friday and witnessed strong momentum despite soft global cues. Nifty managed to close above 9,500-mark which shows confidence from bulls. Nifty managed to close at 9,580.30, adding 90.20 points. Realty, pharma, and FMCG closed on a positive note, but IT and media stocks closed in the red. Nifty bank closed at 19,297.25, adding 127.45 points from the previous day’s closing.
As per the weekly option data, handful of put writing on higher strikes ranging from 9,200 to 9,500 is seen which shows Nifty would witness support in subzone of 9,300 zone. The level of 9,200 will act as support as maximum put open interest (OI) is placed here. But, the index is likely to face stiff resistance at 9,500 as maximum call OI is placed here. We can witness weakness only if Nifty breaks level of 9,200. Therefore, traders should try to create long position keeping close eye on 9,200, as it might act as a base for weekly expiry.
We can see a big momentum in following stocks:
Buy: Reliance Industries Limited (Above Rs 1,483)
Stop loss: Rs 1,440
The stock is forming rounding pattern on the daily charts and has bounced from its important moving averages. Further, the stock is witnessing resistance breakout from 1,482 which might lead the stock to witness more upward movement. Considering the technical evidence discussed, we recommend buying the stock above 1,483 for the target of 1,583, keeping a stop loss at 1,440 on a closing basis.
The stock is trading at the major resistance zone on the daily charts. If somehow the stock breaks the level of 982, then we might witness strong upside momentum. The stock is trying to break its important moving averages.We recommend buying the stock above 985 for the target of 1,075, keeping a stop loss at 930 on a closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.