Market traded higher on Wednesday; Nifty likely to touch 12,270 if sustains above 12,000
Market traded with positive sentiments on strong global cues along with expectation of announcement of scrap policy on automobiles. Nifty closed at 12,100.70 adding 63 points. PSU banks, automobile, and metal stocks traded with positive sentiments throughout the day and gained the most among indices. Nifty bank closed at 31,876 adding 157.70 points to the previous day’s closing and closed at record all-time high.
As per weekly option data, handful of Put writing on lower strikes ranging from 12,000 to 12,100 which shows Nifty is witnessing good support in sub-12,050 zones. Call writing on higher strikes ranging of 12,150 to 12,200 shows market likely to face resistance at higher levels. Traders should try to buy any dip at higher levels as market has maximum put OI at 12,000 which will act as major support levels for the weekly expiry, but 12,200 will act as resistance as maximum OI for the calls stands here. However, if Nifty is able to breach level of 12,200 it will lead to short covering move up to 12,270. Therefore, traders should buy every dip keeping close eye on 12,000.
We can see a big momentum in following stocks:
Buy: Maruti Suzuki India Limited (Above Rs 7,301)
Target: Rs 7,540
Stop loss: Rs 7,150
The stock is witnessing bounce-back from major moving averages in daily chart, moreover stock is witnessing resistance breakout from the level of 7300 and breaching this level will result in good upside momentum. Considering the technical evidence discussed above, we recommend buying the stock above 7301 for the target of Rs 7540, keeping a stop loss at Rs 7150 on closing basis.
Buy: Hero MotoCorp Limited (Above Rs 2,535)
Target: Rs 2,625
Stop loss: Rs 2,471
After consolidating in a narrow range stock is consolidating and ready to witness resistance breakout from level of 2525 and further from the levels of 2535 will lead to a bullish movement. We recommend buying the stock at 2535 for the target of Rs 2625, keeping a stop loss at Rs 2471 on closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.