Short-term outlook for market remains positive: Devang Shah

NIFTY      
CLOSE- 10724.40 (15.02.2019)

Market failed to sustain above 11,000 levels on Nifty after breaking out of range last week and closed near crucial short term support/ reversal levels at the end of weekly trading session. It ended the week in negative territory. Nifty made a high of 11,118 and low of 10620.40 levels, respectively during the week.

One should watch out market behavior at these crucial lower end support/reversal levels for further confirmation of short-term trend. One can expect market to trend towards higher levels targets as mentioned below till it reverses. On the other hand, it may consolidate further in the range of 10,500-11,100 levels before giving breakout in short-term. Any kind of decline or consolidation is buying opportunity till short-term reverses.

It looks like wave-II of 5 corrections in short term from overall wave count perspectives. Broader market (Midcap/Smallcap) is still underperforming at current levels of market. It has to participate in this rally now and the divergences between main indices and broader market is going to end soon.

One should closely watch broader market at these crucial levels of market. Risk reward is favorable to buy specific stocks at current levels of market.

Short-term outlook for the market remains positive till Nifty trades above 10,583 levels and we expect targets in the range of 11,000-11,100 levels in short term. Medium term outlook remains positive till Nifty trades above 9,951 levels and we expect targets in the range of 12,500-12,800 levels in medium term.

BANK NIFTY closed weekly in negative territory. It also looks like triangular consolidation pattern in wave-II from short term wave count perspectives. It is consolidating in the range of 26,500-27,500 levels in short term. 26,500 level is strong support on Bank Nifty, till it holds one can expect higher levels target 1-28,700/28,800 and target2-29,500 levels in short term. 23600 level is strong support for medium term perspective. One can expect higher level targets in the range of 30,000-32,000 levels on medium term perspectives 10,500 and 11,000 levels is strong support and resistance levels, respectively based on option open interest data for current month series. Any kind of such short-term correction or consolidation is buying stock specific opportunity for medium to long term Investment perspectives till medium term reverses.

Momentum indicators Daily KST and DAILY MACD both are in SELL showing weakness but one should wait for price reversal to finally conclude short term trend reversal. One should be stock specific and follow the trend with trail stop loss levels till it reverses. Risk Reward is favorable to BUY at current levels of market. Close below short term reversal levels will lead to sharp correction till 10,300 levels on Nifty and 34,400 levels on Sensex in short term.

Stock Picks:

As market is near my crucial short term support levels, I would not recommend any new trading ideas for this week till we get further clarity on overall trend of market esp. from broader market. One should closely watch market behavior at these crucial levels.

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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.