Market traded range bound on Wednesday; Nifty facing stiff resistance at 12,200
Market traded range-bound due to New Year holiday across Asia and lack of global cues. The Nifty closed at 12,182.50, gaining 14 points. IT, FMCG stocks traded with positive sentiments throughout the day whereas auto sector witnessed some pressure. Nifty bank closed at 32,102.90, shedding 58.75 points from the previous day’s closing.
As per the weekly option data, huge call writing can be seen on higher strikes ranging from 12,200 to 12,300 which shows that Nifty is witnessing stiff resistance in sub-12,250 zones. Traders should try to buy any dip at higher levels as the market has maximum put OI at 12,000 which will act as major support level for the weekly expiry, but 12,300 will act as resistance as maximum OI for the calls stands here. However, if Nifty is able to breach 12,150, it might led to profit booking move up to 12,075. Therefore, traders should try to book profit on higher levels keeping close eye on 12,250.
We can see a big momentum in following stocks:
Buy: Tata Power Company Limited (Above Rs 58)
Target: Rs 63
Stop loss: Rs 54
The stock is sustaining on major moving averages in daily chart and forming the flag pattern. The stock is trading above all major EMAs. Moreover, the stock is witnessing resistance breakout from the level of 57. It has closed above this level and breaching this level will result in good upside momentum.
Considering the technical evidence discussed above, we recommend buying the stock above Rs 58 for the target of Rs 63, keeping a stop loss at Rs 54 on a closing basis.
Buy: Torrent Power Limited (Above Rs 288)
Target: Rs 308
Stop loss: Rs 278
After consolidating in a narrow range, the stock is ready to witness a resistance breakout and further from the levels of 288 might lead to a bullish movement. We recommend buying the stock at Rs 288 for the target of Rs 308, keeping a stop loss at Rs 278 on a closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.
Source: Business Standard
