Nifty outlook and top trading ideas by Prabhudas Lilladher

Nifty outlook and few trading ideas by Vaishali Parekh, research analyst - technical research at Prabhudas Lilladher.

NIFTY VIEW
Nifty after breaking the previous support of 11,250 along with Bank Nifty too and weekly trend being down, we continue to have a corrective bias. The support for the day is seen at 36,860/11,160 while resistance is seen at 37,350/11,300. Bank Nifty would have a range of 26,000-26,500. Market is witnessing selling in almost all sectors; hence we need to wait for stability. RSI, too in the daily chart is at 41 levels, which cannot rule out scope for further correction.

BUY NILKAMAL
CMP: Rs 1,828.90
TARGET: Rs 1,970
STOP LOSS: Rs 1,760
The stock has formed a higher bottom formation pattern at around Rs 1,755 levels which is also where the 200 DMA lies and has indicated a positive revival. The stock has also maintained above the significant 50DMA moving average and with the RSI also showing a trend reversal, a positive bias is maintained. With good volume participation witnessed, we recommend a buy in this stock for an upside target of Rs 1,970 keeping a stop loss of Rs 1,760.

BUY COAL INDIA
CMP: Rs 280.65
TARGET: Rs 302
STOP LOSS: Rs 270
The stock has formed a higher bottom formation and has moved past the significant 50DMA moving average to signify strength and has potential to rise further in the coming days. The RSI also has indicated a trend reversal to signal a buy and with a positive bias maintained the stock is almost on the verge of a breakout above the 200DMA which lies at Rs 281 levels. With good volume participation witnessed, we recommend a buy in this stock for an upside target of Rs 302 keeping a stop loss of Rs 270.

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Markets check: Buy Coal India, IndusInd Bank, BF Utilities

Nifty View:
The downslide has begun with now Nifty resting at a support of 9,850, a break of this would slide it further down to 9,750-9,600 levels. Nifty needs to cross 9,920 to confirm the end of correction. The support for the day is seen at 9,825 while resistance is seen at 9,920.
 
BUY COAL INDIA    
CMP: Rs 257.05    
TARGET: Rs 275    
STOP LOSS: Rs 245
The stock has made a higher bottom formation pattern at around Rs 248 in the daily chart and now has produced a positive candle pattern to show potential and strength to move further upward. The RSI has also indicated a trend reversal signaling a buy thus supporting our positive bias. With good volume participation witnessed, we recommend a buy in this stock for an upside target of Rs 275 keeping a stop loss of Rs 245.

BUY INDUSIND BANK    
CMP: Rs 1,701.70      
TARGET: Rs 1845  
STOP LOSS: Rs 1,640
The stock has been in a rising trend and has regularly taken support at the significant moving average of 34-WMA and currently again it has come to the level of the  34-WMA and is showing a positive bias with potential to rise further up. The stock looks attractive and with accompanied with decent volume participation, we recommend a buy in this stock for an upside target of Rs 1,845 keeping a stop loss of Rs 1640.

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Derivative strategy on Coal India by Motilal Oswal Securities

Option strategy on Coal India by Chandan Taparia, Derivative & Technical Analyst at Motilal Oswal Securities:

Strategy:
COAL INDIA - BULL CALL SPREAD
BUY COAL INDIA 260 CALL
SELL COALINDIA 270 CALL
BEP : 263.50

MAX RISK : 3.50 POINTS (Rs.5950)
MAX REWARD : 6.50 POINTS (Rs.11050)

Rationale:
1) It has bottomed out after the weakness of last six months
2) Managed to hold above 250 zones
3) Given the highest daily close in last eight weeks
4) Call unwinding at 260 strike suggests an up move
5) Maximum Put OI at 250 strike could support the stock
6) Thus Bull Call Spread is recommended to trade the positive to range bound move

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