The market fell sharply on Wednesday, Nifty regained the 8,000 mark
On Wednesday, the markets traded with a positive sentiment and experienced strong short hedging as well as new long positions. The volatility index dropped 7.89%, which shows some relief for the bulls, as volatility is expected to decrease. The street awaits a government stimulus package. Nifty managed to close at 8,317.85, adding 516.80 points. Financial services, private banks and the auto sector traded positively, but none of the sectors closed in the red. Nifty bank closed at 18,481, adding 1,373.10 points to the previous day’s close.
According to the weekly options data, a handful of sales writing on lower strikes ranging from 8,000 to 8,200 is seen, showing that Nifty would face firm support in areas below 8,000. 8,000 will serve as support since the maximum sales OI is placed here after 7,500. We can only witness a short hedge movement and the addition of a new position if Nifty is able to cross 8,500. Consequently , traders should try to create a long position by closely monitoring 8,000.
We can see a great dynamic in the following actions:
Buy TCS limited (above Rs 1,750)
Target: 1,880 rupees
Stop loss: Rs 1,680
The stock is reversing from the lower levels of 1,700 rupees. A new buying momentum would be observed if the stock exceeded 1,750. The breakout of 1,750 would lead the stock to witness a more upward movement. Given the technical evidence discussed, we recommend buying the stock above 1,750 for the target of 1,880 rupees, while maintaining a stop loss at 1,680 rupees on a closing basis.
Buy Hindustan Unilever Limited (above Rs 2,100)
Target: 2,270 rupees
Stop loss: Rs 1,980
The stock forms an inversion pattern on the daily charts and forms an inverted hammer candlestick on a weekly candle. The breakout of 2.100 will cause the stock to witness a more upward movement. We recommend buying the stock above 2.100 for the target of Rs 2.270, keeping a stop loss at Rs 1.980 on a closing basis.
Warning: The analyst does not hold any position in the above mentioned stocks.