Nifty outlook and technical calls for today's trade by Devang Shah

Recommends buying Dabur, Ajanta Pharma, Tata Chemicals, Bharat Financials and Ashok Leyland

 
 
NIFTY     
CLOSE- 10452.50 (03.11.17)
  
Market is extending towards upper end of channel in short term as expected. It made a high of 10,461.70 levels on nifty & 33,733.71 levels on Sensex so far in this rally. It closed 2nd consecutive week in positive territory. All the other index also extended gains on upside & closed weekly in positive territory. Bank Nifty finally confirmed break out from consolidation range on upside as anticipated. One should expect market to trend towards short term targets levels till it reverses. Trader should buy stock specific & book profit at regular intervals. 

 

Although it looks like very high levels both from technical (Extended Rally)   & fundamental perspectives (Valuation wise) but many stocks are giving fresh breakouts from long consolidation. Therefore, It’s advisable to be stock specific at current levels with proper risk management approach to rode such kind of bull market rally further till it reverse in short term. 
 
Short-term outlook for the market remains positive till Nifty trades below 10124 levels and expecting target of 10,750-10,800 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 8,968 levels and is expecting targets in the range of 12,000-12,200 levels in medium term. 

 
I have drawn channel on both Nifty & Sensex weekly charts. It looks like high possibility of extension of this rally till upper end of channel as per weekly chart towards revised short term targets levels as mentioned earlier. In typical such kind of bull market normally wave-3 completes & touches upper end of channel before any kind of major price wise correction. It looks like high possibility to me at current levels of market till short term reverses. It will become strong fast & furious rally in this phase of market. 
 
Nifty Bank also closed weekly in positive territory. It has broken out form consolidation range. It made a high of 25,688.90 levels so far in this rally. One can expect targets of around 27,000 levels on Nifty Bank after these breakouts from consolidation in short term. 24,650 level strong support & reversal levels for Nifty Bank in short term. 

 
10,000/10,200 levels is strong support & 10,500/10,700 levels is strong resistance levels respectively based on option open interest data so far for October month series. Market is going to be volatile ahead of Result season this 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. Close below short term reversal levels will lead to price wise short term correction towards 9680 levels on Nifty & 31081.83 levels on Sensex in short term. One should be stock specific & follow the trend with trail stop loss levels till it reverses. 

 
Stock Picks:  
 
DABUR - BUY
CLOSE – Rs- 340
TARGET – Rs 360 
 
Dabur closed the week in a positive territory. It has started extending in wave-V up. It’s still trading above 20-DMA. Risk reward is favourable to buy at current levels. Its daily momentum indicators are in BUY. One can buy with a stop loss of Rs 326 for the target of Rs 360 in short-term.  
 
AJANTA PHARMA- BUY
CLOSE – Rs 1240
TARGET – Rs 1320-1385 
 
Ajanta Pharma closed daily in positive territory. It looks like end of medium term correction. It’s trading near 200 DMA in short term. Risk reward is favourable to buy at current levels. One can buy with stop loss of 1190 for the target of 1320-1385 levels in short term. 

 
TATA CHEMICALS- BUY
CLOSE – Rs-730
TARGET – Rs 770-790 
 
Tata Chemicals closed daily in positive territory. It has wave-V up pending on weekly chart. It managed to find support at 20DMA. Risk reward is favourable to buy at current levels. One can buy with stop loss of 686 for the target of 770-790 levels in short term. 
 
BHARAT FINANCIALS - BUY
CLOSE – Rs 993.75
TARGET – Rs 1050-1070 
 
Bharat Financials closed weekly in positive territory. It closed above 20 DMA. Its daily momentum indicators are in BUY. Risk reward is favourable to buy at current levels. One can buy with stop loss of 960 for the target of 1050-1070 levels in short term.

 
ASHOK LEYLAND- BUY
CLOSE – Rs 124.95
TARGET – Rs 135-140 
 
Ashok Leyland closed weekly in negative territory. It’s in wave-IV Correction & it has wave-V up pending on weekly chart. It’s closed above 40 DMA. Risk reward is favourable to buy at current levels. One can buy with stop loss of 114 for the target of 135-140 levels 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