Short-term outlook for market positive, be stock specific: Devang Shah

NIFTY      

CLOSE- 11515.20 (14.09.2018)

Market closed the second concecutive week in negative territory. It remained highly volatile in this time-wise consolidation or corrective phase during the week as expected. It made a low of 11,250.20 levels on Nifty and 37,342 levels on Sensex during the week. It managed to hold lower end channel support levels on Nifty and Sensex as per daily chart. It looks like the end of short term correction/consolidation at these lower levels and market is likely extend further towards higher levels targets as mentioned below in short to medium term. Any kind of short term consolidation or correction is stock-specific buying opportunity till short term reverses.

It looks like end of wave-IV of 5 correction as per daily chart on Nifty and Sensex. One needs to see broader market behavior next week to get further clue of overall market. It has to outperform and catch up with main indcies with faster pace in rally ahead. 

Short-term outlook for the market remains positive till Nifty trades above 11,171 levels and expecting targets in the range of 11,900- 12,000 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 9,951 levels and expecting targets in the range of 12,500-12,800 levels in medium term.

BANK NIFTY closed the week in negative territory. It remained underperformer and corrected sharply beyond anticipation during the week. Although wave count is not conclusive in short term but it also managed to hold lower end channel support levels as per daily chart. 26,700 levels looks strong support for Bank Nifty. Till it holds that level, one can exepct higher levels targets till 29,000 levels in short term. 23,600 levels is crucial support for the index from medium term perspective. Till it holds that, one can expect higher levels targets till 32,800-33,000 levels on Bank Nifty in medium term.

11,000/11,200 and 11,600/11,800 levels is strong support and resistance levels, respectively based on option open interest data for expiry perspective for current month series. Any kind of such short term correction or consolidation is buying opportunity for medium to long term investment perspective till medium term reverses.

Momentum indicators Daily KST & DAILY MACD both are in sell indicating volatality in short term. One should be stock specific and follow the trend with trail stop loss levels till it reverses. Close below short term reversal levels will lead to sharp correction till 10,500-10,400 levels on Nifty and 34,900-34,300 levels on Sensex in short term.

Stock Picks: 

CUMMINS INDIA - BUY

CLOSE – Rs 756.50

TARGET – Rs 800-850

CUMMINS INDIA closed the week in positive territory. It is consolidating in narrow range in short term. Its weekly momentum indicators are in BUY. It’s trading above 40DMA. One can BUY with a stop loss of Rs 700 for the target of Rs 800-850 levels in short-term. 

INDIAN OIL - BUY

CLOSE – Rs 155.10

TARGET – Rs 163-170

IOC closed the week in positive territory. It looks like end of medium term correction with ending digonal pattern on daily chart. Risk Reward is favorable to BUY at current levels. Its daily momentum indicators are in BUY. One can BUY with a stop loss of Rs 145 for the target of Rs 163-170 levels in short-term. 

TATA GLOBAL - BUY

CLOSE – Rs 233.10

TARGET – Rs 245-255

TATA GLOBAL ended the week in positive territory. It looks like end of medium term correction. Its daily momentum indicators are in BUY. It closed above 20 DMA. One can BUY with a stop loss of Rs 215 for the target of Rs 245-255 levels in short-term.

KOTAK BANK - BUY

CLOSE – Rs 1238.85

TARGET – Rs 1268-1290

KOTAK BANK closed the daily  in positive territory. It looks like end of medium term correction at lower end of channel as per weekly chart. It managed to hold 200 DMA. Risk Reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs-1200 for the target of Rs 1268-1290 levels in short-term. 

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

Disclaimer: The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.