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Nifty outlook and top trading ideas by Devang Shah

Short-term outlook for the market remains positive till Nifty trades above 10,404 levels and expecting target of 10,750-10,850 levels in short term

Devang Shah  |  New Delhi 

Photo: Shutterstock
Photo: Shutterstock

NIFTY

CLOSE- 10681.25 (12.01.2018)

Market slow & steady extending towards short term targets levels as expected last week. It closed 6th consecutive week in positive territory. One should expect market to trend towards upper end of channel for two possible targets levels as mentioned below in this last phase of extended rally in short term. One can’t rule out profit booking from higher levels. Trader should be stock specific & book profit at current levels.

Broader market is out performing compare to at current levels. They all are moving in parallel channel. And all the indices ( Mid-cap & Small-cap) almost reached till upper end of channel. One can’t rule out profit booking in broader market from these levels.

Short-term outlook for the market remains positive till trades above 10,404 levels and expecting target of 10,750-10,850 levels in short term. Medium term outlook for the market remains positive till trades above 8,968 levels and expecting targets in the range of 12,000-12,200 levels in medium term.

Bank closed weekly in positive territory. It’s still under performing in this rally compare to main indices & broader market as well. Extension in Bank will be to watch out in short term. 25,280 is crucial support for Bank in short term, till it holds one can expect higher levels targets till 26,300-26,600 levels in short term. On the other hand, break of this support levels will lead to sharp correction till 24,900 levels in short term. Bank behaviour is key to watch out in short term.

I feel this is last phase of extended wave-(3) rally of Bull market & typically market will finally TOP Out in January for wave-(4) price wise corrections as per Time cycle. Trader should be stock specific & closely watch out market behaviour at higher levels. Market will remain volatile ahead of corporate earnings season this month.

10,500-10,800 levels is strong support & resistance levels respectively based on option open interest data so far for January month series. Any kind of short term correction or consolidation is buying opportunity for medium to long term Investment perspectives till medium term reverses.

Momentum indicators & daily MACD both are in BUY supporting short term trend. One should be stock specific & follow the trend with trail stop loss levels till it reverses. Close below short term reversal levels will confirm price wise correction till 9,880/9,700 levels on & 32,300-31,000 levels on Sensex in short term.

Market closed 5th consecutive week in positive territory. Its slow & steady extending towards short term targets levels as expected last week. Broader market is out performing compare to at current levels. All the other indices such as midcap & small cap also closed weekly in positive territory. One should expect market to trend towards short term targets levels till it reverses. Typically, we have seen 5 positive weekly rallies in recent times. Since we have closed 5th positive weekly close, one can’t rule out profit booking from higher levels. Trader should be stock specific & book profit at current levels.

Stock Picks:

L&T- BUY

CLOSE – Rs 1,327

TARGET – Rs 1,355/1,380

closed weekly in positive territory. It has wave-V up pending on daily chart. Its momentum indicators are in BUY. Risk reward is favorable to buy at current levels. One can buy with stop loss of 1308 for the target of 1355/1380 levels in short term.

BHARAT FORGE-BUY

CLOSE – Rs 729.25

TARGET – Rs 770

BHARATFORGE closed weekly in negative territory. It’s consolidating in triangular kind of pattern as per daily chart. It has also wave-V UP Pending as per daily charts. Risk reward is favourable to buy at current levels. One can buy with a stop loss of Rs 710 for the target of Rs 770 in short-term.

CADILA HEALTH- BUY

CLOSE – Rs 449

TARGET – Rs 460-465

closed the weekly in a positive territory. Its looks like end of medium term correction. It’s managed to close above 40 DMA. Risk reward is favourable to buy at current levels. Its daily momentum indicators are in BUY. One can buy with a stop loss of Rs 430 for the target of Rs 460-465 in short-term.

FED BANK- BUY

CLOSE – Rs- 115.30

TARGET – Rs 119/121

closed the weekly in a positive territory. It’s showing sign of extension further after end of medium term consolidation in this pull back rally. Risk reward is favourable to buy at current levels. Its daily momentum indicators are in BUY. One can buy with a stop loss of Rs 112.40 for the target of Rs 119/121 levels in short-term.


Devang Shah: The author of www.trendtechno.com (Trade with Trend) and an independent market analyst

Disclaimer: The analyst may / may not have a position in the scrips mentioned above; the views given above are the personal views of the analyst.Consultant & Advisors in the world of Financial Market.Disclaimer:

The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.

First Published: Mon, January 15 2018. 08:19 IST
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