Nifty outlook and stock picks by Gaurav Garg of CapitalVia Global Research

Nifty outlook

Last week, markets traded with positive sentiment on strong global cues and closed at record high weekly closing level since February. Nifty managed to close above 11,900 at 11,914.20, adding 79.60 points. Banking stocks, technology sector traded with positive sentiments whereas Pharma, metal, and realty closed in the red, with marginal loss. Nifty bank closed at 23,804.80, adding 655.20 points from the previous day’s closing.

As per weekly option data, handful of put writing on lower strikes ranging from 11,700 to 11,900 is witnessed which shows Nifty would face firm support in sub 11,800 zone. The level of 11,000 will act as support as maximum put OI is placed here. We can witness short covering move along with addition of fresh position if Nifty breaches 12,000. Therefore, traders should try to create long position keeping close eye on 11,700. 

We can see a big momentum in following stocks: 

Buy Eicher Motors Limited (Above Rs 2,260): 

Target:  Rs 2,385

Stop loss:  Rs 2,175

The stock is witnessing reversal from lower levels of Rs 2,150. Resistance level breakout from the level of 2,260, which is immediate resistance, might lead stock higher. The stock is sustaining above important averages. Considering the technical evidence discussed, we recommend buying the stock above 2,260 for the target of Rs 2,385, keeping a stop loss at Rs 2,175 on a closing basis.

Buy State Bank of India (Above Rs 200):

Target: Rs 224

Stop loss: Rs 186

The stock is forming a reversal pattern on daily charts. Breakout from the level of 200 would lead the stock to witness more upward  movement. The stock is showing signs of reversals with volumes We recommend buying the stock above 200 for the target of Rs 224, keeping a stop loss at Rs 186 on a closing basis.

Disclaimer: Gaurav Garg is Head of Research at CapitalVia Global Research Limited- Investment Advisor. The analyst does not hold position in any of the stocks mentioned above. Views expressed are personal.