Is Nifty set for a breakout? Analysts see signs of a shift ahead
Nifty hovered near 24,175, needing to clear 24,200 to regain strength. Analysts suggest bullish option spreads for rebounds and caution against a 23,900 break. HEG and Laurus Labs are recommended buys with specific targets and stop losses. Glenmark Pharmaceuticals and Shipping Corporation of India also present buying opportunities. Newgen Software and Elgi Equipments show positive chart setups…
The Nifty index lingered within a 23,800–24,700 range last week, ultimately settling at 24,175.65. Analysts believe the index should break through the 24,200–24,400 zone to resume upward momentum. Various strategies are being proposed: some traders advocate for bullish option spreads to capitalize on rebounds, while a more cautious group warns of potential further decline should the 23,900 level be breached.
Chandan Taparia, head of Derivatives and Technicals at Motilal Oswal Financial Services, suggests a Bull Call Spread strategy for the weekly September 1 expiry. This involves buying one lot of the 24,200 strike Call Option and selling one lot of the 24,400 strike Call Option, with a maximum risk of 75 points (approximately Rs 4,875).
Top picks for the week include Heg (Buy, CMP Rs 737, Target Rs 780, Stop loss Rs 710), which has rebounded strongly after testing its breakout zone near Rs 700 and is holding above it. Laurus Labs (Buy, CMP Rs 1,938, Target Rs 2,050, Stop loss Rs 1,880) is in a strong uptrend, trading at all-time highs and respecting its 20 DEMA.
Technical analysis indicates Nifty has crucial support at 24,000, and a rebound toward 24,300 is possible as long as this level holds. The recommended Bull Call Spread strategy involves buying one lot of the 24,200 Call at Rs 97 and selling one lot of the 24,300 Call at Rs 51, resulting in a net debit of 46 points and a maximum profit potential of 54 points per lot (approximately Rs 3,510).
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
