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Weekly Picks 11th September 2023

Written by - Fisdom Research

September 9, 2023 7 minutes

1. Tata Motors Ltd

CounterTATAMOTORS LTP 627.2
CallBuy on dip
Target 1660
Target 2700
Stop Loss598
Time Horizon1-2 months
NotesBuy-on-dip towards 525 & 505

Tata Motors Group is a prominent worldwide automotive manufacturer. The company boasts a varied product lineup, encompassing many automobiles such as cars, SUVs, trucks, buses, and defence vehicles. As one of India’s largest OEMs, Tata Motors offers a comprehensive selection of integrated, intelligent, and electric mobility solutions. The company is at the forefront of spearheading India’s Electric Vehicle (EV) transition, championing the movement toward sustainable mobility solutions. It accomplishes this by formulating a customised product strategy, capitalising on the synergies among its group companies, and actively engaging with the government to shape the policy framework.

Previous Close614.9TTM EPS31.9
52 Week High665.4TTM PE19.6
52 Week Low375.2P/B0.7
Sector PE52.6Mkt Cap (Rs. Cr.)208,392

(Source: Moneycontrol, BSE, Fisdom Research)

Technical Outlook

(Source: Fisdom Research)

  • The primary trend for this counter continues to be “upward.”
  • After consolidating for five weeks, this counter is on the cusp of a potential breakout.
  • Maintaining levels above 598 and 580 indicates that both the short-term and mid-term trends are bullish, with the potential to reach 660 and a significant milestone of 700 in the coming months if it continues to trade above 625.

Open Interest Study

ExpiryCPStrikeOpen Interest
28-Sep-23CE6203538
28-Sep-23CE6503374
28-Sep-23CE7003308
28-Sep-23CE6303289
28-Sep-23PE6003126
28-Sep-23PE6102468
28-Sep-23CE6402213
28-Sep-23PE6201889
28-Sep-23CE6101708
  • According to the September Option Chain analysis, the counter shows the highest Call Option build-up at the 620, 650, and 700 Strikes, suggesting potential resistance levels.
  • Conversely, on the lower end, the maximum Put Option build-up is observed at 600, 610, and 620 Strikes, highlighting 620 as a significant “Tug-Of-War” level for the upcoming week.
  • It may be worth considering a Covered Bull Ratio Spread strategy, given the prevailing options data and market conditions.

F&O Strategy

ScripTATAMOTORS LTP 627.2
RiskModerate
Ratio1:1
BiasHolding above 600 – “Range to up”
Max Reward Expected₹25,000
Max Risk Expected₹18,000
ActionScripQuantityIPLTP
BUYTATAMOTORS SEP 620 CE142519.8519.85
SELLTATAMOTORS SEP 650 CE14257.457.45
Invest Now

2. Federal Bank Ltd

CounterFEDERALBANK LTP 147.5
CallBuy on dip
Target 1155
Target 2160
Stop Loss139
Time Horizon3-4 Weeks
NotesBuy-On-Dip towards 145 & 140

Federal Bank has emerged as the preferred banking partner for a diverse range of customers throughout India, spanning personal, NRI, and business banking needs, regardless of whether in urban or rural areas. The foundation of their exceptional performance is firmly rooted in a decade-long dedication to digital advancements. Their cutting-edge digital capabilities position them as a highly sought-after institution in the neo-banking landscape.

With the introduction of digital products and innovative digital marketing initiatives, the bank strategically positioned itself to leverage new opportunities more effectively, leading to an impressive 86% share of digital transactions. Their commitment to building a secure credit portfolio, prioritizing quality over quantity while maintaining organic and granular liabilities, underscores their dedication to the theme of capital conservation and sustainable growth.

Previous Close145.0TTM EPS14.5
52 Week High148.3TTM PE10.1
52 Week Low109.4P/B1.5
Sector PE24.2Mkt Cap (Rs. Cr.)34,660

(Source: Moneycontrol, BSE, Fisdom Research)

Technical Outlook

(Source: Fisdom Research)

  • The counter recently experienced a significant breakout from a twelve-month consolidation period, surpassing the 140-level last month.
  • Following this consolidation, the counter concluded at its peak, suggesting the possibility of further gains in the upcoming weeks.
  • Investors may consider accumulating this stock at current market rates and on any price dips, as it has the potential to reach levels around 170 in the coming months.

Open Interest

ExpiryCPStrikeOpen Interest
28-Sep-23CE1502834
28-Sep-23CE1451679
28-Sep-23PE1451458
28-Sep-23CE1601245
28-Sep-23PE1301215
28-Sep-23PE1401066
28-Sep-23CE155995
28-Sep-23PE135684
28-Sep-23CE140588
  • Based on the September Option Chain analysis, the counter exhibits significant resistance at the 150 Strike while maintaining a crucial support level at 145.
  • In the short term, the prevailing bias suggests a trading range. However, if the counter manages to sustain levels above 150, it may attract fresh buying interest and trigger short covering, potentially leading to higher levels in the coming weeks.

F&O Strategy

ScripFEDERALBANK LTP 147.5
RiskModerate
Ratio1:1
BiasHolding above 140 – “Range to up”
Max Reward Expected₹27,000
Max Risk Expected₹17,000
ActionScripQTYIPLTP
BUYFEDERALBANK SEP 145 CE50005.305.30
SELLFEDERALBANK SEP 154 CE50001.851.85
Invest Now

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