Medium term Nifty target around 6,950-6,900: Devang Shah

NIFTY
CLOSE- 7655.05 (04.09.2015)

Nifty Closed 4th consecutive week in negative territory. We have seen sharp pull back rally in wave-IV at the end of last week. It made a high of 8091.80 levels in wave-IV pull back rally. Market failed to sustain at higher levels as anticipated & it started to further fall from these levels. It has achieved first short term targets levels as anticipated last week. It made a low of 7626.85 levels & closed nearer to it at the end of weekly trading session.

All the other indices also closed weekly in negative territory. Nifty & rest of the other indices such as Bankex, Midcap & small cap etc are showing sign of extension in wave-V & we are going to see further lower levels targets as mentioned below in short term. Such kind of extension in wave-V happens rare but when it happens we may see more pains in short time.

Short term outlook for the market remains negative till Nifty trades below 7846 levels & expecting targets in the range of 7470-7280 levels in short term. And further below it, if market is going for super extension in down fall in recent correction, then we may see lower levels targets till 6950-6900 levels in medium term.

CNX BANKEX is also extending in wave-V. One can expect further lower levels targets in the range of 15500-15250 levels in short term.

MIDCAP & SMALL CAP indices are also showing sign of extension in wave-V in short term. These indices have still comparatively out performing V/S Main Index & Bankex. Therefore, there is much more pain still remaining esp. in stocks of these segments at current levels of market.

 
Momentum indicators daily KST & daily MACD both are in SELL. Sustain above short term reversal levels will confirm further trend towards higher levels targets of 8100-8250 levels in short term. One should be stock specific & follow the trend with till it reverses.

Stock Picks:

TATA POWER - SELL
CMP - Rs 56.55
TGT - Rs 54/51

TATA POWER closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. It’s extending in wave-V for further lower levels targets in short term. One can SELL with SL- Rs 58.70 for the target of Rs 54/51 levels in short term.

IDBI BANK - SELL
CMP - 55.55
TGT - Rs 52.50/50

IDBI BANK closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. It’s extending in wave-V for further lower levels targets in short term. One can SELL with SL- Rs 57.60 for the target of Rs 52.50/50 levels in short term.

VOLTAS - SELL
CMP - Rs 253.80
TGT - Rs 245/227

VOLTAS closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. It’s extending in wave-V for further lower levels targets in short term. One can SELL with SL- Rs 264 for the target of Rs 245/227 levels in short term.

SRF - SELL
CMP - Rs 1105
TGT - Rs 1040/1002

SRF closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. It’s extending in wave-V for further lower levels targets in short term. One can SELL with SL-1180 for the target of Rs 1040/1002 levels in short term.

STRIDES ARCOLAB - SELL
CMP - Rs 1144
TGT - Rs 1090/1000

STRIDES ARCOLAB closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. It’s extending in wave-V for further lower levels targets in short term. One can SELL with SL- Rs 1212 for the target of Rs 1090/1000 levels in short term.

Devan Shah is Portfolio Manager- PRO TECH-PMS at Sharekhan

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