Moreover, Street’s expectation that Put writers at the 20,000 strike will defend this level going ahead brings more cheers for the bulls.
Rupak De, Senior Technical analyst at LKP Securities said the mood will remain upbeat as long as the Nifty stays above 20,000 and will weaken only if there’s a drop below 20,000. In his view, the Put writers will defend this level. For traders, a buy-on-dips strategy is recommended, he said, estimating the resistance at Rs 20,200-20,230. If this level is breached, the index could potentially move towards 20,450-20,500, De opines.
We spoke to analysts on how one should trade stocks that were in focus in the previous trading sessions based on derivative and technical data:
Analyst: Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy told ETMarkets
Grasim Industries delivers all-time high breakout
The level of 2000 was a round number and a psychological barrier for Grasim. The stock after hitting that level witnessed a sharp correction and found support at the 100 DMA.
Grasim recovered since then, to close above 2000 on Wednesday. Despite volatility, the stock managed to close above 2000 with good volumes on Thursday confirming the breakout. The daily RSI is at 66 indicating a good upside potential from here.
An analysis of the option chain indicates call buying at strike prices above as well as below 2000. On the put side the strike price of 1900 has maximum OI followed by 2000.
These factors point out that Grasim is ready for an upward move from here and can see levels of 2100-2140 in the short term and 2200 in the medium term. The stop loss can be placed at 1940.
Axis Bank gives ‘Cup and Handle’ breakout
Banking stocks have been doing good for the past one-and-a-half years with Axis Bank being one of the better stocks. Axis Bank has risen about 75% since June last year.
1050 was a supply zone for the stock and the stock corrected about 10% from there. But on Wednesday, the stock gave a breakout at this level with good volume followed by another strong candle on Thursday.
The Daily RSI is at 69 indicating strength and a good upside potential.
On the derivative front, call buying was seen at strike prices above as well as below ATM whereas huge writing was seen on the put side.
Seeing the momentum, the stock can see levels of 1200 in the short to medium term. Stop loss can be placed slightly below 1000.
AgenciesLTIMindtree sees a double-bottom pattern breakout
The last two years have been a bad phase for the IT stocks. But now with the expectation of a rate hike pause, IT stocks are witnessing fresh demand.
After reaching an all-time high of 7500, LTIM saw a steep correction with the stock falling almost 50%. But since April this year, the stock has been on the upward move reaching the level of 5500.
5500 was a strong resistance for the stock which was crossed with good volumes forming a double-bottom breakout pattern on the charts. Now the stock is consolidating above it for the past 10 trading sessions. The RSI is also at 61.93 indicating strength on the upside.
An up move from here can take the stock to 6000 in the short term. A dynamic stop loss can be placed at the 50 DMA as seeing its momentum, LTIM should not go below it.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)