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Top trading ideas by CapitalVia: Buy Indiabulls Housing Finance, BPCL

Strength in Nifty will be witnessed only if it breaks 10,000
Indices moved sharply on Thursday; Nifty closed at month high above 9,800-mark

Market traded with positive sentiments throughout Thursday's session and rallied up to 9,900, led by sharp short covering along with strong global markets cues. Nifty managed to close at 9,859.90, adding 306.55 points. Auto, technology sector traded with positive sentiments whereas Pharma and media sector closed in the red. Nifty bank closed at 21,534.50, adding 444.30 points from the previous day’s closing.

As per weekly option data, handful of put writing on lower strikes ranging from 9,500 to 9,800 is seen which shows Nifty would witness firm support in sub 9,500 zone. 9,500 will act as support as maximum put open interest (OI) is placed here. But the index is likely to face stiff resistance at 10,000 as maximum call OI is placed here. We can witness strength only if Nifty breaks level of 10,000. Therefore, traders should try to create short position keeping a close eye on 10,000.

We can see a big momentum in following stocks: 

Buy: Indiabulls Housing Finance Limited (Above Rs. 135)

Target: Rs. 152

Stop loss: Rs. 125

The stock is witnessing a reversal pattern on daily charts. Further, the stock is taking support from the zone of 120. Breakout from 135 would lead it to witness more upward movement. Considering the technical evidence discussed, we recommend buying the stock above 135 for the target of 152, keeping a stop loss at 125 on a closing basis.

Buy: Bharat Petroleum Corporation Limited (Above Rs 375)

Target: Rs 405

Stop loss: Rs 350

The stock is forming a bullish flag pattern on daily charts and is also bouncing from its important moving average placed at 360. Breakout from its resistance placed at 375 would lead the stock to witness more upward movement. We recommend buying the stock above 375 for the target of 405, keeping a stop loss at 350 on a closing basis.

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

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