Nifty outlook and key trading ideas by Devang Shah

NIFTY CLOSE- 10491.05  (23.02.2018)

The market managed to hold lower end support levels as mentioned in last week & started to pull back rally after expiry today as expected. It managed to find support near 10300 levels on Nifty. It made a low of 10276 levels so far on Nifty in this correction. We can expect the market to pull back towards target1-10600-10680 levels on Nifty in short-term & in extreme levels if it is, then it can stretch till target2-10830 levels on Nifty in this pullback rally. The trader should use this pullback rally to sell or exit till short-term reverses.

Its forming Right shoulder of Head & shoulder pattern on this wave-IV correction as per overall medium-term wave count chart attached. It looks like Wave-X pullback rally with Right shoulder formation till short-term reverses. A trader should be very stock specific with strict stop loss levels in this pullback rally. we can see further lower levels targets as mentioned below in this wave-IV correction till lower end of the channel before final bottoming out as per chart attached in short term.

The short-term outlook for the market remains negative till Nifty trades below 11172 levels and expecting a target of 10000-9800 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 the medium term.

It looks like TIME wise wave-IV correction & will last it at least till March end before final wave-V UP begins as per my expectation.Any kind of such short-term correction or consolidation is buying opportunity for medium to long-term Investment perspectives till medium term reverses.

Bank Nifty also closed weekly in positive territory. It's relatively more underperforming then other indices. It made a low of 24752.80 levels so far in this correction. It also looks like a case of a strong pullback rally till target1-25900-26100 levels in short-term & in extreme levels if it is, then it can stretch till target2-26500 levels in this pullback rally. Its also forming of the Right shoulder of Head & shoulder pattern on this wave-IV correction as per overall medium-term wave count chart attached.It looks like wave-X pullback rally with Right shoulder formation till short-term reverses. One can expect lower levels targets till 24000-23600 levels in this correction till it trades below 27660 levels in short term. 

10000-10200 & 10700-10800 levels are strong support & resistance levels respectively based on option open interest data so far for this month series. The market will remain very volatile in this corrective phase. 

Momentum indicators Daily KST & daily MACD both are in SELL supporting the short-term trend. One should be stock specific & follow the trend with trail stop loss levels till it reverses. Close above short-term reversal levels will finally confirm further rally towards medium-term higher levels targets.

Stock Picks: 

BUY BATA

CLOSE: Rs 722

TARGET: Rs 750/775

BATA closed weekly in positive territory. It has wave-V pending on a monthly chart. It’s still trading above 40 DMA. Its managed to find support near 200 DMA. One can BUY with the stop loss of 690 for the target of 750/775 levels in short term.

BUY IOC

CLOSE: Rs 369

TARGET: Rs 385-400

IOC closed daily in positive territory. It trading near lower end support levels. It has wave-V up pending as per quarterly chart. It looks like the high possibility of end of medium-term correction near these support levels. Risk reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs 345  for the target of Rs 385-400 levels in short-term. 

BUY SUN TV

CLOSE: Rs 932.40

TARGET: Rs 965/985

SUN TV closed the weekly in positive territory. It managed to hold the crucial support of 100 DMA. It also closed below 20DMA. Its daily momentum indicators are in BUY. One can buy with a stop loss of Rs 889 for the target of Rs 965/985 levels in short-term. 

BUY INDUSIND BANK

CLOSE: Rs 1649.95

TARGET: Rs 1675/1730

INDUSIND BANK  closed the day in positive territory. Its managed to hold the crucial support of 200 DMA. It has wave-V up pending on the quarterly chart. Risk Reward is favourable to BUY at current levels. One can buy with a stop loss of Rs 1586 for the target of Rs 1675/1730  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.