Medium term outlook remains positive: Devang Shah

NIFTY
CLOSE- 8672.15 (12.08.16)

Market consolidated in narrow range for the entire week. It managed to find support near lower end of range & closed at higher end of range at the end of trading session. It’s trading in narrow range of 8470-8730 during week. Breaking of this range will lead to directional trend in the market. One should expect market to trend towards higher levels in short to medium term. One should use any kind of decline or consolidation to BUY stock specific for higher levels targets 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.

Bank nifty also managed to hold lower end support. It’s trading in narrow range for the entire week. It made a low of 18,526 levels & started to rally from these levels. It closed near crucial resistance of 20,000 levels. Sustain above these levels will open higher levels targets towards all time higher levels of 20,700-20,900 levels in short to medium term from wave count perspectives.

Momentum indicators Daily KST & DAILY MACD both are in sell showing weakness may create volatility in short term. 8500/9000 levels looks strong supports & resistance levels respectively based on derivative option open interest data for this month series at current levels of market. One should be stock specific & follow trend till it reverses in short term.

Stock Picks:

VEDANTA-BUY

Target: Rs 180

Stop Loss: Rs 154

Vedanta is consolidating in thin range for the entire week. It looks like completion of short term consolidation of wave-IV. It managed to hold 40 DMA. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 154 for the target of Rs 180 levels in short term.

M&M: BUY

Target: Rs 1500/1550

Stop Loss: Rs 1412

M&M is outperforming in short term. It closed weekly in positive territory. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 1412 for the target of Rs 1500/1550 in short term.

Punjab National Bank: BUY

Target: Rs 138/146

Stop Loss: Rs 117.90

PNB Managed to close 40 DMA. It has completed short term correction. Its weekly momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 117.90 for the target of Rs 138/146 in short term.

HDFC: BUY

Target: Rs 1420/1450

Stop Loss: Rs 1325

HDFC closed weekly in positive territory. It has completed short term correction. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 1325 for the target of Rs 1420/1450 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.