Nifty outlook and four trading ideas for today's trade

NIFTY

CLOSE- 8934.55 (10.03.17)

Nifty closed the week in positive territory. It consolidated in thin range of 8860-8980 levels for the entire week. It still looks like either triangular or flat kind of consolidation as per daily chart attached. Nifty has strong first support around 8850 and second support around 8700 levels. One should expect the market to trend towards higher level targets till short term reverses. Any kind of decline or consolidation is buying opportunity for medium to long term.

Momentum indicators are showing weakness but one needs to wait for price confirmation in such kind of extended upward rally to finally conclude short term reversal ahead of major event next week. Market will remain volatile ahead of UP elections results & Fed Policy event next week. Trader should be stock specific & book profit at regular intervals. As we are in final wave-V of rally started from bottom of around 7893 levels on nifty & 25,753.74 levels on sensex on 26.12.2016 as per my view, so one can’t rule out profit booking from higher levels.

Short term outlook for the market remains positive till Nifty trades above 8,680 levels and expect targets in the range of 9,120-9,240 levels in the short term. Medium term outlook for the market remains positive till Nifty trades above 8,327 levels and expect target of 10,000 levels on Nifty in medium term.

BANK NIFTY has also closed weekly in positive territory. It also shows similar short term wave counts like nifty. It looks like wave-IV consolidation stage in short term. It has strong supports around 20400 levels & 20000 levels respectively in short term. Till second support of 20000 levels holds any kind of decline or consolidation is a buying opportunity for bank nifty & one can further expect higher levels targets till 21600-22000 levels in short term. 

NIFTY is still forming HIGHER TOP LOWER BOTTOM Bullish formation as per DOW THEORY. This kind of extended Trend, such theory works well to RIDE the trend further till it’s proven otherwise. 8860 is strong support & reversal as per DOW THEORY for short term trend. 8700-9200 is strong support & Resistance zone respectively based on derivative option open interest data so far for current month series. 

Momentum indicators Daily KST & daily MACD are in SELL indicating weakness & volatility to remain in short term but one needs to wait for price confirmation or any other further evidences to finally conclude short term reversal in such kind of extended one sided up ward rally. One should be stock specific & follow the trend with trail stop loss levels till it reverses from trading perspectives. Close below short term reversal levels will lead to possible correction till 8540-8460 levels on nifty & 27590-27459 levels on Sensex in short term.

Stock Picks:

AXIS BANK-BUY

CLOSE- Rs 515.55

Target- Rs 530/545

AXIS BANK closed weekly in positive territory. It has wave-V up pending on upside. Its Weekly momentum indicators are in BUY. It also closed above 40-DMA. Risk reward is favourable to BUY at current levels. One can BUY with stoploss of Rs 500 for the target of Rs 530/545 in short term.

CONCOR- BUY

CLOSE- Rs 1244.85

Target- Rs 1270/1298

CONCOR closed weekly in negative territory. Its weekly momentum indicators are in BUY. It closed above 40-DMA. Risk reward is favourable to BUY at current levels. One can BUY with stoploss of Rs 1217 for the target of Rs 1270/1298 in short term.

SUN PHARMA-BUY

CLOSE- Rs 683.55

Target- Rs 710/725

BEL closed weekly in positive territory. It closed above 20-DMA. Its weekly momentum indicators are in BUY. It is consolidating in range for the entire week. Risk reward is favourable to BUY at current levels. One can BUY with stoploss of Rs 663 for the target of Rs 710/725 in short term.

AIA ENGINEER-BUY

CLOSE-1457

Target-1570

AIA ENGINEER closed the week in positive territory. Its weekly momentum indicators are in BUY. It closed above 20-DMA. Risk reward is favourable to BUY at current levels. One can BUY with stoploss of Rs 1,398 for the target of Rs 1,570 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.