Nifty outlook and key trading ideas by Devang Shah

Short-term outlook for the market remains positive till Nifty trades above 10,490 levels and expecting target of 10,950-11,000 levels in short term, says Devang Shah

NIFTY CLOSE:10,894.70(19.01.2018)

Market closed 7th consecutive week in positive territory. It has reached & surpassed upper end of parallel channel & achieved my all short term targets levels as expected earlier. It made a high of 10,906.20 levels on Nifty & 35,540.47 levels on Sensex so far in this rally. It closed at very crucial levels at the end of weekly trading session. One should watch out market behaviour at this crucial levels, sustain above these levels will only confirm further higher levels targets till 11,300-11,500 levels on Nifty & 36,100-36,500 levels on Sensex in short term till that one should book partial profit or Hedge portfolio at this crucial levels.

Broader Market such has midcap & Small cap indices has under-performed the main indices during the week & closed weekly in negative territory. It has seen profit booking from higher levels & given up earlier ahead of main indices. One should watch out these indices behaviour at these crucial levels. It has to participate in this rally to make it further strong to achieve higher levels targets in short term. 

Bank Nifty finally participated in rally & we have seen sharp rise this week. It has also finally achieved my short term targets levels near recent high as expected earlier. It made high of 26,947.80 levels & closed at the high levels at the end of weekly trading session. One should watch out Bank Nifty behaviour as well to finally confirm extension of recent rally for further higher levels targets in short term. 

Short-term outlook for the market remains positive till Nifty trades above 10,490 levels and expecting target of 10,950-11,000 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 8,968 levels and expecting targets in the range of 12000-12200 levels in medium term.

I expected January to be typically TOP OUT stage for Indian equity market & we will complete wave-3 rally of Bull market & will see beginning of wave-4 price wise correction but so far market is extending & making new highs since last 7 week after Gujarat election results. Since now it has already reached upper end of channel as per chart attached on Log scale, one should closely watch out market behaviour at these levels unless it extends further towards linear scale touch point till 11,300-11,500 levels on Nifty but typically, I have studied & seen many channel reactions correction from upper end of range since 1986 from my experience in Indian indices.

10,700-11,000 levels is strong support & resistance levels respectively based on option open interest data so far for expiry next week. Market will remain volatile ahead of expiry & budget event next month. Any kind of short term correction or consolidation is buying opportunity for medium to long term Investment perspectives till medium term reverses.

Momentum indicators Daily KST & daily MACD both are in BUY supporting short term trend. One should be stock specific & follow the trend with trail stop loss levels till it reverses. Close below short term reversal levels will confirm price wise correction till 9,880/9,700 levels on Nifty & 32,300-31,000 levels on Sensex in short term.

Stock Picks:

M&M- BUY

CLOSE � Rs 764
TARGET � Rs 782/800

M&M closed weekly in negative territory. It�s outperforming in short term. It has wave-V up pending on daily chart. It�s still trading above 40 DMA. Risk reward is favorable to buy at current levels. One can buy with stop loss of Rs 730 for the target of Rs 782/800 levels in short term.

AXIS BANK-BUY

CLOSE � Rs 590
TARGET � Rs 625

Axis Bank closed weekly in positive territory. Its showing sign of extension in short term. Risk reward is favourable to buy at current levels. One can buy with a stop loss of Rs 570 for the target of Rs 625 in short-term. 

DCB BANK- BUY

CLOSE � Rs 190
TARGET � Rs 210-215

DCB closed the weekly in negative territory. Its looks like end of short term correction. It�s managed to close above 40 DMA. Risk reward is favourable to buy at current levels. Its weekly momentum indicators are in BUY. One can buy with a stop loss of Rs 180 for the target of Rs 210-215 in short-term. 

Devang Shah: The author of www.trendtechno.com (Trade with Trend) and an independent market analyst

Disclaimer: The analyst may / may not have a position in the scrips mentioned above; the views given above are the personal views of the analyst.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.