Close- 8114.30 (25.11.16)
Nifty closed first weekly closed first weekly positive close after decline of consecutive last four weeks. It has achieved my first targets levels as expected last week near recent lows. It made a low of 7,916.40 levels so far in this correction. It managed to find support & started pull back rally from these levels. One can see pull back rally to extend further till 8,250/8,300 levels on Nifty in short term till recent lows holds. Any kind of pull back rally is selling & exiting opportunity till short term reverses.
All the other indices such as BSE 500, BSE Midcap & BSE Small Cap also closed weekly in positive territory while Nifty Bank closed weekly in negative territory. The other indices also indicating either time wise or price wise consolation or pull back rally can possible before next round of further selling starts in short term. One can expect market to extend on down side towards revised short term targets levels as mentioned below till trend reverses.
Nifty Bank has strong support around 18,200 levels till it holds one can expect pull back rally till 19000 levels in short term. Break of 18,200 levels will confirm further sharp correction till 16,900- 17,100 levels in short to medium term.
It looks like completion of first round of correction as wave-W on Nifty/Sensex & BSE 500 indices from wave count perspectives as per chart attached. We may see recent rally as wave-X pull back rally till recent lows as mentioned above holds from over all wave count perspectives in short term. We may see wave-Y correction for further lower levels targets till short term reverses.
We have seen first time unwinding of all long positions by FII on futures data after 01.03.2016 i.e. budget 2016 this year near bottom of around 6825 levels on nifty. One should also watch out FII behaviour in coming trading session as an additional confirmation for overall view of market. Such kind of neutral zone from which further building of new position at either of side will lead to major directional trend in market from short to medium term perspective based on historical data.
Short term outlook for the market still remains negative till Nifty trades below 8,470 levels & expecting targets in the range of 7,700-7,680 levels in this short term correction. Medium term outlook for the market remains negative till nifty trades below 8,737 levels & expecting targets in the range of 7,600-7,300-7,000 levels in medium term.
Momentum indicators Daily KST came in to BUY but Daily MACD is still in SELL indicating volatility in short term. 8000 is strong support based on derivative option open interest data in short term. Break of it will be an additional confirmation of wave-(Y) second round of selling beginning in short term. One should use any kind of pull back rally to sell or exit till short term trend reserves. Close above short term reversal levels will confirm further rally till 8,550-8,650 levels in short term. One should be stock specific & follow the trend with trail stop loss levels till it reverses.
Close – 260.65
SBI closed weekly in negative territory. It looks like end of 5 wave advance rally. Its momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. One can SELL with SL-277 for the target of Rs 235 in short term
BAJAJ FIN- BUY
BAJAJ FIN closed daily in positive territory. It looks like possibility of pull back rally in short term from trading perspectives. Its daily momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with SL-803 for the target of Rs 938 in short term.
GRANULES INDIA closed weekly in positive territory. It looks like possibility of pull back rally in short term from trading perspectives. Its daily momentum indicators are in BUY. One can BUY with SL-102 for the target of Rs 115 in short term.
AIA ENGINEERING closed weekly in positive territory. It’s out performing in short term. Its daily momentum indicators are in BUY. It looks like beginning of wave-V up rally on weekly chart. One can BUY with SL-1,180 for the target of Rs 1,360/1,460 in short term
Devang Shah: The author of www.trendtechno.com (Trade with Trend) 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.