Day Trading Guide: Nifty has immediate support at 11,700 level

Amit Trivedi, YES Securities

Nifty gained for the straight session, sustenance above 11,800 mark post gap up opening kept Nifty in a positive territory throughout the session. Improvement in the Nifty breadth along with sustained move above 15 days EMA suggests immediate floor near 11700 mark; while on the higher side, it could revisit 12,000.

Meanwhile, recouping prior week’s losses, Bank Nifty reclaimed 24,200. Appearance of two bullish candles suggests crucial support near the 23200-23000 zone, which is likely to be held from a near term perspective. PSU Bank index is gaining some positive traction; positive follow-up action could attract some outperformance in the near term.

Index strategy
Covered call on Nifty Bank
(Expiry: 22nd October)

Buy Nifty Bank October Future near 24300
Sell 24700 call option near 170

• Target: 24700
• Stop loss: 24010
• Appearance of another bullish candle along with a long build up on futures warrants a positive outlook for Nifty Bank, sustenance above 24,000 in the coming sessions could lift it towards 24700-24800 zone.

Stock options
Buy Axis Bank 500 Strike Call near 12

• Target 25
• Stop loss 6
• The recent rally in Axis Bank has been substantial and has managed to breach recent resistance levels near 480. Sustenance above short term averages is likely to keep near term outlook positive.

Equity recommendations
1. Buy City Union Bank October near 149

• Target: 160
• Stop loss: 144
• Forming a series of ascending bottoms, the stock is gradually gaining traction on the upside. Monday’s price action took the form of bullish candle with large lower shadow, positive follow through could continue recent revival.

2. Buy Ceat near 1040

• Target: 1110/1140
• Stop loss: 1005
• CEAT represents a potential buying opportunity from a near term perspective. Given the recent swift recovery from the 960 zone, improved relative strength, this stock could be worthy of a spot in a short term portfolio.
  

(Amit Trivedi is Technical Analyst for Institutional Equities at Yes Securities. Views are his own)