Medium term outlook for the market remains negative: Devang Shah

One should expect lower levels targets in this correction till short term reverses: Devang Shah

NIFTY
CLOSE- 8,349.35 (20.01.17)
 
Nifty finally ended weekly positive momentum & closed first weekly in negative territory after preceding third weekly positive close. It has almost achieved my target range of 8,440-8,480 near recent high as expected last week. It faced resistance around these levels & started to fell near from these levels. It has Completed 5 wave advance rally near recent high started from recent bottom of around 25,753.70 levels on sensex & 7,893.80 levels on Nifty. Its sufficient confirmation to conclude short term reversal at current levels of market. One should expect lower levels targets in this correction till short term reverses.

 
The rally from recent bottom is counted as impulsive but medium term outlook for the market is still negative, therefore taking it as wave-C of expanding flat correction as of now. I will review recent correction to further review of bullish wave counts possibility. But till that trader should be cautious & book profit at current levels of market till short term reverses.

 
Short term outlook for the market remains negative till Nifty trades below 8,462 levels & expecting targets in the range of 8,250-8,100 levels in this short term correction. Medium term outlook for the market remains negative till Nifty trades below 8,600 levels & expecting targets in the range of 7,600-7,300-7,000 levels in medium term.

 
BANK NIFTY also closed weekly in negative territory. It has exactly achieved short term targets levels near recent high as expected earlier. It made a high of 19,297.40 levels. It looks like possibility end of wave-B short term pull back rally. One can expect lower levels till short term reverses. 19,300 is strong resistance & short term reversal levels for Bank Nifty in near term.
 
Broader market such as BSE midcap, BSE 500, NSE Midcap also closed weekly in negative territory. These indices also started to reverse from very important resistance levels & showing weakness on charts in short term. It’s also additional confirmation supporting short term trend.

 
Overall a long term wave count of Indian equity bull market is still intact as per yearly chart of nifty & quarterly chart of bank nifty. Investor should use this correction to buy stock specific in tranches for long term perspectives.
 
Momentum indicators Daily KST went in to sell but DAILY MACD are still in BUY may create volatility in short term ahead of expiry next week. 8,000/ 8,400 levels are strong support & Resistance levels respectively based on derivative option open interest data in short term. Market will remain volatile ahead of budget event in coming days as well. Sustain above short term reversal levels will confirm rally towards 8,550-8,600 levels in near term. One should stock specific & follow the trend till it reverses from trading perspectives. 

 
Stock Picks:
 
HDIL- SELL
CLOSE-60.50
Target-55
 
HDIL closed weekly in negative territory. It’s underperforming in short term. Its daily momentum indicators are in SELL. It looks like end of short term pull back rally. Risk reward is favourable to SELL at current levels. One can SELL with SL-64.25 for the targets of 55 in short term.
 
TATA GLOBAL- SELL
CLOSE-126.50
Target-118
 
TATA GLOBAL closed weekly in negative territory. It’s underperforming in short term. Its daily momentum indicators are in SELL. It looks like end of short term pull back rally. Risk reward is favourable to SELL at current levels. One can SELL with SL-132 for the targets of 118 in short term.

 
CENTURY TEXTILE- SELL
CLOSE-799
Target-770-750
 
CENTURY TEXTILE closed weekly in negative territory. It’s underperforming in short term. Its daily momentum indicators are in SELL. It looks like end of short term pull back rally. Risk reward is favourable to SELL at current levels. One can SELL with SL-829 for the targets of 770-750 in short term.
 
PUNJAB NATIONAL BANK- BUY
CLOSE-128.20
Target-138
 
PNB closed weekly in positive territory. It’s out performing in short term. Its daily momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with SL-121 for the target of 138 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.