Expect further lower levels targets in short to medium term: Devang Shah

Short term outlook for the market remains negative till Nifty trades below 8,275 levels: Devang Shah

NIFTY
CLOSE- 7985.75 (23.12.16)
 
Market closed second consecutive week in negative territory. It extended correction on down side & finally confirmed short term trend reverses with end of wave-X pull back rally at the end of weekly trading session. It made a low of 7,942.05 levels so far in this correction during this week. One can expect further lower levels targets as mentioned below in short to medium term.
 
I expected pull back rally to extend further in short term in my last weekly update but market has finally confirmed end of pull back rally with short term trend reversal at the end of this week. It retraced around 50% near recent high of around 8,275 levels in this pull back rally. All the other indices such as midcap, small cap & Bankex etc. also closed weekly in negative territory. It’s also showing weakness & extending correction in near term.

 

Short term outlook for the market remains negative till Nifty trades below 8,275 levels & expecting targets in the range of 7,715/7,680 levels in short term. Medium term outlook for the market remains also negative till Nifty trades below 8,737 levels & expecting targets in the range of 7,500/7,470-7,300 levels in medium term.
Trader should use any kind of rise or consolidation to sell till trend reverses.
 
Nifty Bank is underperforming in short term. It has broken crucial support of 17,980 levels showing sign of extension of correction. One can expect lower levels targets of around 16,900 levels in short term & 16,000 levels in medium term. Short term outlook for bank nifty remains negative till it trades below 18,770 levels.

 
Momentum indicators daily KST SELL & daily MACD both are in sell supporting short term trend view. 8,000-8,300 is strong support & resistance levels respectively based on derivative option open interest data for this month expiry. Market will remain volatile ahead of expiry next week. It may make possibly a further attempt to close near or above 8,000 levels on Nifty ahead of expiry next week. But one should strictly follow trend till it reverses.
 
Investors buy stock specific in tranches rather than one go in this on-going correction. One should also look to invest in mutual funds or Nifty BEES is SIP way in this correction to take the benefit of every lower levels of market till medium term reverses or market bottoming out. 

 
Stock Picks:
 
IOC-BUY
 
CLOSE-313.25
 
Target-333
IOC is outperforming in short term. It closed weekly in positive territory. Its momentum indicators are in BUY. It has managed to hold 20 DMA. Risk reward is favourable to BUY at current levels. One can BUY with SL-300 for the target of 333 in short term.

 
SBI-SELL
 
CLOSE-249
 
Target-235
 
SBI closed weekly in negative territory. Its momentum indicators are in sell. It’s closed below 20 DMA. Risk reward is favourable to SELL at current levels. One can BUY with SL-258 for the target of 235 in short term.

 
CANARA BANK –SELL
 
CLOSE-279
 
Target-260/255
 
CANARA BANK closed weekly in negative territory. Its momentum indicators are in SELL. It also closed below 20 DMA. Risk reward is favourable to SELL at current levels. One can SELL with SL-296 for the target of 260/255 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.