Medium term outlook for market remains positive: Devang Shah

Nifty is still trading or time wise consolidating in narrow range of 8500-8700 levels.

NIFTY
CLOSE- 8572.55 (26.08.16)

Market is still consolidating in narrow range on 6th consecutive week. It closed weekly in negative territory. It failed to give break out on upside as expecting during expiry week. It closed near lower end of range at the end of weekly trading session. It’s still trading or time wise consolidating in narrow range of 8500-8700 levels. Breaking of this range will lead to strong directional trend in the market. It still looks like wave-IV Time wise consolidation as per daily chart. One should expect wave-V upwards rally after breaking of this range upside. One should use such kind of decline or consolidation to BUY stock specific for higher levels targets in short term reverses.

Bank nifty has already broken out of short term consolidation on upside as expected last week. One should expect it to trend towards life time higher levels for the targets in the range of 20,800-21000 levels in short to medium term.

Short term outlook for the market remains positive nifty trades above 8476 levels & expecting targets in the range of 8800-8850 levels in short term. Medium term outlook for the market remains positive till nifty trades above 7927 levels & expecting targets in the range of 9120-9400 levels in medium term.

Momentum indicators Daily KST & DAILY MACD both are in sell showing weakness may create volatility in short term. Close below short term reversal levels will lead to sharp correction till 8300 levels in short term. One should be stock specific & follow trend till it reverses in short term.

Stock Picks:

ASIAN PAINTS-BUY

Close- Rs 1124
Target- Rs 1185

ASIAN PAINTS is outperforming in short term. It looks like end of short term consolidation. It managed to hold 40 DMA. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 1095 for the target of Rs 1185 levels in short term.

TATA MOTORS-BUY

CLOSE- Rs 514
Target- Rs 545

TATA MOTORS is outperforming in short term. It’s managed to hold 40 DMA. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 486 for the target of Rs 545 in short term.

AXIS BANK-BUY

CLOSE- Rs 586
Target- Rs 613

AXIS BANK is outperforming in short term Its still trading above 20 DMA. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 560 for the target of Rs 613 in short term.

HPCL-BUY

CLOSE- Rs 1180
Target- Rs 1260

HPCL is outperforming in short term. It has completed short term correction. It’s still holding 40 DMA. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 1140 for the target of Rs 1260 in short term.


The author 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.