Markets witnessed profit booking at higher level; Nifty facing stiff resistance at 9,000
Market traded with negative sentiments in the second half of Wednesday’s session due to weaker global cues, which triggered selling pressure in broader indices. Nifty managed to close at 8,748.75, slashing 43.45 points. Pharma, Automobile and media sectors traded with positive sentiments whereas reality, technology sector closed in the red. Nifty bank closed at 18,946.50, down 173.25 points from the previous day’s closing.
As per the weekly option data, handful of call writing on higher strikes ranging from 8,800 to 9,200 is seen which shows that Nifty would face stiff resistance in sub 9,000 zone..8,000 will act as support as maximum put open interest (OI) is placed here. But the index is likely to face stiff resistance at 9,000 as maximum call OI is placed here. We can witness strength only if Nifty breaks the level of 9,000. Therefore, traders should try to create short position keeping a close eye on 9,000.
We can see a big momentum in following stocks:
BUY: Tata Consumer Products Limited (Above Rs 297)
Target: Rs 316
Stop loss: Rs 280
The stock is witnessing reversal from lower levels of Rs 275. Further buying momentum would be witnessed if the stock moves above 297. Breakout from 297 would lead to the stock witnessing more upward movement. Considering the technical evidence discussed above, we recommend buying the stock above 297 for the target of Rs 316, keeping a stop loss at Rs 280 on a closing basis.
Buy: Tata Elxsi Limited (Above Rs 660)
Target: Rs 735
Stop loss: Rs 620
The stock is forming a reversal pattern on daily charts along with RSI-indicator witnessing positive divergence on weekly charts. A breakout from its resistance placed at 660 would lead the stock to witness more upward movement. We recommend buying the stock above Rs 660 for the target of Rs 735, keeping a stop loss at Rs 620 on a closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.