8500 level is crucial support for short term: Devang Shah

NIFTY
CLOSE- 8583.10 (14.10.16)

Market closed weekly in negative territory. It continued short term correction. It’s still trading in broad range of 8500-9000 levels in short term. It has extended on down side further in short term correction for wave-Z & achieved my short term targets levels as expected last week. It made a low of 8541 levels on nifty. It closed near lower end of range at the end of weekly trading session. All the other indices Such as BANKEX, MIDCAP & SMALL CAP also closed weekly in negative territory.

8500 levels is crucial support for short term. One needs to watch out market behaviour around these levels to get further clue on short term trend on market. From Investment perspectives, one should BUY stock specific around these levels from medium term perspectives.

Short term outlook for the market still remains negative till nifty trades below 8808 levels & expecting targets in the range of 8540-8500 levels in this short term correction. Medium term outlook for the market remains positive till nifty trades above 8294 levels & expecting targets in the range of 9400-9700 levels in medium term.

FII data are showing unwinding of long positions in this short term correction. One should also look lout FII behaviour at current levels of market to get further clue on short term trend of market.

BANK NIFTY also achieved short term targets in this correction as expected last week near recent lows. It made a low of 18824.40 levels. One should also watch out its behaviour around these levels 19816 is short term reversal levels for bank nifty.18300 is strong support on bank nifty from medium term perspectives.

Broader market (Midcap & Small Cap) is still out performing so far in these corrections as expected. It’s very good sign at current levels of market. One should watch out these indices behaviour also around these levels. Further out performance of these indices will lead to possibility of sharp reversal on main indices (Nifty/Sensex) in short term.

Momentum indicators Daily KST & Daily MACD both are in SELL supporting short term trend. 8500 & 9000 looks strong support & Resistance levels respectively based on derivative option open interest data for short term. Sustain above short term reversal levels will confirm further rally towards 9120-9200 levels in near term. One should be stock specific & follow trend with trail stop loss levels till it reverses in short term.

Stock Picks:

TCS-BUY
CLOSE- Rs 2366
Target- Rs 2450/2500
TCS closed daily in positive territory. Its looks like end of short term correction. It has managed to hold medium term support levels. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 2290 for the target of  Rs 2450/2500 in short term

POWER GRID-BUY
CLOSE- Rs 177.70
Target- Rs 184/190

POWER GRID closed daily in positive territory. Its looks like end of short term correction. It managed to hold medium term support levels. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 172 for the target of Rs 184/190 in short term

BPCL -BUY
CLOSE- Rs 666.85
Target- Rs 686/706

BPCL closed daily in positive territory. It’s outperforming in short term. It looks like end of short term correction. It has still wave-V up pending in short term. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 646 for the target of Rs 686/706 in short term.

SUNPHARMA -BUY
CLOSE- Rs 745
Target- Rs 790

SUNPHARAM closed daily in positive territory. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 730 for the target of Rs 790 in short term.

VOLTAS -BUY
CLOSE- Rs 397
Target- Rs 425/440

VOLTAS closed weekly in positive territory. It’s outperforming in short term. It’s closed near life time high levels. It is showing sign of extension in wave-V of weekly chart. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 376 for the target of Rs 425/440 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.