Short-term outlook for market remains positive: Devang Shah

NIFTY      

CLOSE- 11456.90  (22.03.2019)

The market closed in positive territory for the fifth consecutive time during the last week. Nifty made a high of 11,572.80 levels during the week. It witnessed profit booking from higher levels at the end of the weekly trading session. One can expect the market to move towards higher level targets as mentioned below until it reverses. Any kind of decline or consolidation is buying opportunity till short term trend reverses.

We have seen a sharp rally on Bank Nifty and Nifty in the short term, while midcap and small-cap indices remained in consolidation zone. I expect midcap and small-cap indices as well as stocks to witness a rally in coming weeks and we may see main indices such as Nifty/Bank Nifty trading in consolidation range for some time. In that case, Nifty may consolidate in the range of 11,100-11,500 levels in short term.

It looks like the beginning of wave-III of 5 after long consolidation in the range from wave count perspectives. Participation from broader market (Particularly, midcap and small-cap indices) from the last couple of days are good signs at current levels of the market. It has to catch up now for further confirmation of the overall trend of the market. It looks like high possibility end of this divergence at the recent bottom and from now onwards, we will get a broader market rally for higher level targets in short to medium term. Risk reward is favourable to buy stock specific at current levels of the market.

The short-term outlook for the market remains positive till Nifty trades above 10,940 levels and we expect targets in the range of 11,700 levels in the short term. The medium-term outlook for the market remains positive till Nifty trades above 9,951 levels and we expect targets in the range of 12,500-12,800 levels in the medium term.

BANK NIFTY also closed in positive territory for the fifth consecutive week. It’s the first index to make a lifetime high, as expected. It is just short of my short term stretchable target of around 30,200 levels. It made a high of 30,092 levels during the week. It also witnessed profit-booking from higher levels at the end of the weekly trading session. It is highly in an overbought zone as of now; therefore, one can’t rule out profit booking from current levels. 

27000 level is strong support on Bank Nifty in the short term, till it holds that level, any kind of decline or consolidation is buying opportunity for higher levels targets in the medium term. It may consolidate in the range of 28,600- 30,200 levels in the short term. 23,600 level is strong support for medium-term perspective. Till it holds that level, one can expect higher level targets in the range of 32,000-33,000 levels from a medium-term perspective.

11,000 and 11,600 levels are strong support and resistance levels, respectively, based on option open interest data for expiry perspective this week. Any kind of short-term correction or consolidation is a stock specific buying opportunity for medium to long term investment perspective, till medium-term reverses.
 

Momentum indicators Daily KST & DAILY MACD both are in BUY supporting short term trend of market. One should be stock specific and follow the trend with trail stop loss levels till it reverses. Risk reward is favourable to BUY at current levels of market. Close below short-term reversal levels will lead to a sharp correction till 10,300 levels on Nifty and 34,400 levels on Sensex in short term.

Stock Picks:
 

CUMMINS: BUY
 

CLOSE: Rs 749.95
 

TARGET: Rs 800/820
 

CUMMINS ended the week in the positive territory. It consolidated in a thin range during the week. Its daily momentum indicators are in BUY. Risk reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 700 for the target of Rs 800/Rs 820 levels in short term.
 

NALCO – BUY
 

CLOSE – Rs 54
 

TARGET – Rs 59/64
 

NALCO consolidated in a thin range during the week. Its weekly momentum indicators are in BUY. It has consolidated above 20-DMA. Risk reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 51 for the target of Rs 59/64 levels in short term.
 

RAYMOND – BUY
 

CLOSE – Rs 806
 

TARGET – Rs 865/895
 

Raymond closed weekly in negative territory. It consolidated in thin range during the week. Its weekly momentum indicators are in BUY. Risk reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 765 for the target of Rs 865/895 levels in short term.
 

RIL – BUY
 

CLOSE – Rs 1,344.25
 

TARGET – Rs 1,395/1450
 

RIL closed weekly in positive territory. It has outperformed in the short term. Its daily momentum indicators are in BUY. Risk reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 1,307 for the target of Rs 1,395/1450 levels in the 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.