Stock picks of the day: Use correction to go long in Nifty; RIL, Quess Corp can return 6-11%

Nifty, after taking support from the gap created on September 23, recovered more than 80 points from the low to close with the losses of 38 points at 11474 levels. Though Nifty has fallen nearly 300 points from the recent high to a low of 11390 level, primary trends is still intact where Nifty is still trading above its 200-day SMA. Oscillators and Momentum Indicators like RSI and MACD have been showing strength on the daily and weekly charts for Nifty and Bank Nifty.

 

Nifty formed a major bottom of 10670 and rallied towards 11695 recently. 38.2 percent Fibonacci retracements of the swing is placed at 11303 which is likely to act as an immediate support going forward.

 

We have seen Put writing at 11300-11400 strike prices, indicating Nifty is likely to find strong support in the vicinity of 11300-11400. Unless the index closes below it, trend would be considered bullish for the markets. On the upside, 11700 level to act as an immediate resistance where Calls have been written.

 

Bank Nifty formed a major bottom of 26643 and rallied more than 4000 points to touch an intraday high of 30800. 50 percent Fibonacci retracements of the entire swing is placed at 28700 which are likely to act as an immediate support going forward. This support level coincides with the 200-day SMA which is placed at 28766 levels.