Nifty has strong support at 4,980: Nirmal Bang

Nifty has strong support at 4,980: Nirmal BangPositive global cues and firm buying at lower levels helped the Sensex recover early losses and close higher. The Sensex swung 366 points from its low point of 16,622 to finish up 92 points at 16,958. The Nifty gained 24 points to close at 5,027 after hitting an intra-day low of 4,921. Constant buying was seen in metal, FMCG, banking and capital goods stocks while telecom, technology, cement, realty and oil marketing shares remained under pressure The Oct Nifty future ended with 10 points premium.

Positive global cues helped the Indian market sentiment to improve and witnessed firm buying in metal, FMCG and banking stocks which helped the Nifty to close above the 5K mark. Technically markets are overstretched but the undertone is bullish as buying is witnessed at lower levels. The short-term trend could slightly get weaker only if Nifty decisively trades below the 4,900 level with good volumes. The intermediate trend still remains positive as the markets has not given any negative divergence and are still holding very strong above their crucial support levels.

For tomorrow, Nifty has strong support at 4,980 level, if this level gets broken then witness selling pressure emerging and nifty might again test 4,915 or 4,815 very shortly. On the higher side 5,060 is the stiff resistance area, unless we see a break above 5,060 fresh buying should be avoided.

STOCK IDEA:

1) BAJAJ HIND (181) - Buy, the stock has been consolidating in the range of 172-183, if the stock maintains above 183 with huge average volumes of 25 lac shares then expect a target of 198-210. Short stop-loss 177.

2) KFA (57.50) - Buy and hold with a stop-loss of 56 or 54, huge accumulation happening, if maintains above 59 with average volume of 30 lac shares then look for a target of 65-71 in the short run.

3) PVP LTD (43) - Buy for short term, huge delivery volume witnessed today, this stock has corrected a lot in the short run from the top of 60 and made a low of 39 yesterday. If maintains above 45, then look for a re-test target of 60 in the near term. Stop-loss is 38.

4) TataSteel (510) - Buy and hold with a stop-loss of 493, the stock has managed to hold this level for quite some time, if tomorrow the stock maintains above 515, then look for 545.

NIFTY FUTURE DAILY CHART: If we look at the Nifty future daily chart, it shows clearly that Nifty future has taken strong support at the 20-day Simple Moving Average and has closed on a strong note above the 5K mark. Now going forward if Nifty future maintains above 5,060 for quite some time then it seems that the next level to watch out is 5,160. Stop loss should be maintained at 4,990 - 4,960, if this levels get violated with negative market breadth then only see the Nifty moving towards 4,900-4,800.