Chandan Taparia’s Top Picks: How to Trade Zydus Lifesciences, Federal Bank, and IOC Shares Amid Market Dip on July 26

Indian stock market benchmarks, the Sensex and Nifty 50, continued their losing streak for the fifth straight session on Thursday, July 25, influenced by weak global trends. The Sensex fell by 109 points, or 0.14%, to close at 80,039.80, while the Nifty 50 dropped 7 points, or 0.03%, ending at 24,406.10.

Chandan Taparia, Head of Equity Derivatives and Technicals at MOFSL, provided his insights:

“The Nifty index opened 180 points lower but quickly recovered. It found support at 24,200 zones, regained its losses, and crossed 24,400 levels. It stayed positive and range-bound in the second half, closing above 24,400 as bulls absorbed any minor dips. A Bullish candle formed on the daily frame, but it has been making lower highs for the last four sessions. It needs to hold 24,350 zones for an upward move toward 24,550 and 24,700 zones, with supports at 24,200 and then 24,100 zones.”

India VIX increased by 6.38% from 11.76 to 12.51 levels. Although volatility has risen after cooling off in the last two sessions, the overall lower VIX supports a bullish market stance.

On the options front, the maximum Call OI is at the 25,000 then 25,500 strike, while the maximum Put OI is at the 24,000 then 23,000 strike. Call writing is seen at the 25,500 then 25,000 strike, and Put writing is seen at the 23,000 then 24,000 strike. Option data suggests a broader trading range between 24,000 to 24,800 zones, with an immediate range between 24,200 to 24,600 levels.

Bank Nifty Outlook

Taparia added, “The Bank Nifty index opened 500 points lower and fell to 50,550 zones in the first half. It then consolidated between 50,600 to 50,900 zones, forming a small-bodied candle on the daily scale. The index has been making lower tops and bottoms for the last few sessions, closing near 50,900 levels. If it holds below 51,250 zones, some weakness may be seen toward 50,500 then 50,250 levels, while the upside hurdle is at 51,250 then 51,500 zones.”

Stocks to Buy

Chandan Taparia recommended three stocks to buy on July 23:

Zydus Lifesciences: Buy at ₹1205 | Target Price: ₹1300 | Stop Loss: ₹1160

Zydus Lifesciences is in an overall uptrend and maintaining gains at higher levels. It is respecting the 50 DEMA and broke a trend line on the daily chart. It formed a strong bullish candle on the daily scale and gave its highest daily close ever, which may support the ongoing rally.

Federal Bank: Buy at ₹204 | Target Price: ₹225 | Stop Loss: ₹195

Federal Bank is outperforming in the Private Banks space and is trading at life highs. It has been forming higher tops and bottoms for the past four weeks, with supports gradually moving higher.

Indian Oil Corporation: Buy at ₹176 | Target Price: ₹190 | Stop Loss: ₹168

IOC has broken out of its range on the weekly chart and formed a bullish Marubozu candle on the daily scale. Buying is visible across the OMC space, which has bullish implications.