Medium term Nifty target around 7,420-6,950: Devang Shah

Nifty
CLOSE-7,954.30 (06.11.2015)

Nifty closed 2nd consecutive week in negative territory. It slow but steady extending towards lower levels as anticipated. It has achieved my first short term target of 7960 levels as expected last week. It made a low of 7926.15 levels at the end of weekly trading session. All the other indices such as BANKEX, MIDCAP& SMALL CAP etc also closed weekly in negative territory. It looks like wave-C/III down started on main index for lower levels targets in short term as mentioned below.

Short term out look for the market remains negative till Nifty trades below 8116 levels & expecting targets in the range of 7,850-7,785-7,690 levels in short term. Medium term out look for the market remains still negative till Nifty trades below 8,655 levels & expecting targets in the range of 7,420-6,950 levels in medium term.

Midcap & Small cap indices also broken bearish Head & Shoulder pattern on down side & closed below 40 DMA. One can expect further sharp fall in these indices in coming trading session. CNX BANKEX has also started wave-III or C down side for lower levels targets of 16670-16700 levels in short term.

Momentum indicators daily KST & Daily MACD both are in SELL supporting short term trend. Close above short term reversal levels will lead to possibility of rally till 8,180-8,200 levels in short term. One should be stock specific & follow the trend till it reverses

Stock Picks:

RELIANCE INDS- SELL
CMP- Rs 951.35
TARGET- Rs 920/883

RIL closed weekly in Positive territory. Its Daily momentum indicators are in SELL. Risk reward is favorable to SELL at current levels. One can SELL with Stop Loss of Rs 975 for the target of Rs 920/883 levels in short term.

RELIANCE CAPITAL- SELL
CMP- Rs 410
TARGET- Rs 390/374

RELIANCE CAPITAL closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favorable to SELL at current levels. One can SELL with Stop Loss of Rs 424 for the target of Rs 390/374 levels in short term.

YES BANK-SELL
CMP- Rs 764
TARGET-Rs 708

YES BANK closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favorable to SELL at current levels. One can SELL with Stop Loss of Rs 790 for the target of Rs 708 levels in short term.

GLENMARK PHARMA-SELL
CMP - Rs 963
TARGET-Rs 928/880

GLENMARK PHARMA closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favorable to SELL at current levels. One can SELL with Stop Loss of Rs 981 for the target of Rs 928/880 levels in short term.

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

The author is Portfolio Manager- PRO TECH-PMS at Sharekhan.