Expect targets in 8,330-8,430 range in short term: Devang Shah

It's advisable for trader to be stock specific & follow a stop loss levels in trading position in short term, says Devang Shah

NIFTY
 
CLOSE- 8,139.45 (16.12.16)
 
Market consolidated in very thin range for the entire week. It made a high of 8,274.95 levels on Nifty. It faced resistance around these levels & once again back near to lower end of range at the end of weekly trading session with weekly negative close. It looks like triangular possibility in wave-X in this consolidation stage & hope of pull back rally to extend further is still alive till short term reverses. Breakout of this range at either of side will lead to strong directional trend with momentum in short term. Trader should closely watch out short term reversal levels to finally conclude trend reversal in near term.

 

From overall wave count perspectives, it looks like wave-C down to begin for lower levels targets in medium term, once pull back rally completes or short term reverses. It has already retracted around 50% near recent high in this pull back rally. And hope is still alive to retrace it till 61.8% towards higher levels targets till short term reverses.
 
All the other indices such as midcap, small cap & Bank Nifty closed weekly in negative territory. They all are trading in thin range for the entire week. Particularly, Bank Nifty has still hope of wave-B pull back rally to extend further towards higher levels targets of , levels till is holds 17,980 levels in short term. In overall wave count perspectives, one can expect lower levels targets till 16,650 levels in medium term.

 
Short term outlook for the market remains positive till Nifty trades above 8,077 levels & expecting targets in the range 8,330-8,430 levels in short term. 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.
 
8,000-8,300 looks strong support & Resistance respectively on Nifty so far based on derivative option open interest data for this month series. As medium term trend is still down, it’s advisable for trader to be stock specific & follow a stop loss levels in trading position in this counter trend move in short term.

 
Momentum indicators Daily KST & Daily MACD both are in BUY supporting short term trend. Market may trade in range of 8,000-8,400 levels in short term. Close below short term reversal levels will lead to sharp fall till 7,700 levels on nifty & 25,180/25,000 levels on Sensex in short term. One should be stock specific & follow the trend with trail stop loss levels till it reverses.  
 
Stock Picks:
 
RALLIS INDIA-BUY
 
CLOSE-199.90
 
Target-224
 
RALLIES INDIA closed daily in positive territory. It’s consolidating in range from last two weeks. It has managed to hold 20 DMA. Risk reward is favourable to BUY at current levels. One can BUY with SL-194 for the target of 224 in short term.

 
BHARAT ELECTRONICS-BUY
 
CLOSE-1,444
 
Target-1,525
 
BHARAT ELECTRONICS closed daily in positive territory. It’s outperforming in short term. It managed to hold 40 DMA. It has wave-V up pending on weekly charts. Risk reward is favourable to BUY at current levels. One can BUY with SL-1383 for the target of 1525 in short term.
 
AIA ENGINEERING –BUY
 
CLOSE-1,316
 
Target-1,408/1,450
 
AIA ENGINEERING closed daily in positive territory. It’s outperforming in short term. It managed to hold 40 DMA. It has wave-V up pending on weekly charts. Risk reward is favourable to BUY at current levels. One can BUY with SL-1240 for the target of 1408/1450 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.