Hero MotoCorp is consolidating within a range for the past few weeks and the stock is now slowly approaching the short-term resistance levels of 3000. Hero MotoCorp has closed above its 21-day short-term moving average level of 2873. It has formed a bullish candlestick pattern in the weekly chart. The resistance is at Rs. 3000 and Rs. 3050 and the support level is placed at Rs. 2850 and Rs. 2800. Based on futures OI data, Hero MotoCorp is witnessing a Short Covering.
Based on option OI data, the highest put open interest was seen at 2800 strike followed by 2900 strike. The highest call open interest is seen at 3000 strike followed by 2900 strike. As the stock is closed above its one of the highest put build up strike, we expect any further move will result in short covering and it can take the stock to higher levels.
We recommend you to invest in Hero MotoCorp above Rs. 2930 for a short-term tar of Rs. 3090. The Stop Loss is placed at Rs. 2845
Forthcoming Results and Events:
Nifty gained more than 440 points to end the week at a record closing level of 18338.55. The bullish momentum has gained strength after Nifty broke out of its consolidation band of 17300 to 17950. The rally is also supported by a broader market. Nifty has formed a strong bullish candle in both weekly and daily time frames. Volatility index India VIX is trading at 15.77. We expect the market to be volatile as long as India VIX trades above 14 levels.
Based on weekly option data, the highest PUT OI was seen at 18100 followed by 18000 strike which will act as a strong support. We expect Nifty to be bullish as long as the index trades above 17950 levels.
The highest CALL OI was seen at 19000 strike followed by 18500 strikes, which will act as a stiff resistance. Any close above 18500 can take the index to 19000 levels in the near term.
Equity Gyan 