Short term outlook for markets remain positive; buy JSPL, Raymond

NIFTY      

CLOSE- 11,712.25  (03.05. 2019)

Market closed marginally in negative territory on a weekly basis. It consolidated in narrow range for fourth consecutive week and made a high of 11,856.20 levels on Nifty so far in this rally. It consolidated in the range of 11,550-11,800 levels for the entire month of April after sharp surge seen in March. There is a high possibility of wave-III of 5 Extension case in short term towards revised higher levels targets. 11,300 is also another strong support on Nifty for short term. Any kind of decline or consolidation is stock specific buying opportunity till short term reverses. 

Short-term outlook for the market remains positive till Nifty trades above 10,940 levels with an expected, short term, target in the range of 12,300-12,500 levels. Medium term outlook for the market also remains positive till Nifty trades above 9,951 levels with expected target in the range of 12,800-13,200 levels.

Midcap and small cap Indices closed weekly in negative territory. They are still underperforming in short term as compared to main indices (Nifty/Sensex and Nifty Bank). It has to catch up now for further confirmation of overall trend of the market. One should closely watch out broader market behavior in coming weeks at current levels of market ahead of election outcome this month. 

There is a high possibility for end of this divergence at recent bottom and from now onwards, we will get broader market rally for higher levels targets in short to medium term. And eventually midcap and small cap indices will also make all time high in this calendar year. Risk Reward is favourable to ‘buy’ for specific stocks at current levels of market.

Nifty Bank also closed marginally weaker on weekly basis. It consolidated in narrow range for 5th consecutive week and has made a high of 30,915.70 levels so far in this rally. It has consolidated in the range of 30,700-29,400 levels for entire month of April after sharp rally in March.

It also looks like wave-III of 5 extension case on the index in short term. 27,000 level is strong support on the index. If it holds that, one can expect higher levels targets till 32,500 levels in short term. 29,200-29,400 levels are strong support zone for Nifty Bank in the short term. Any kind of decline or consolidation is buying opportunity till short term reverses. 23,600 level is strong support for medium term perspective. If that is maintained, one can expect higher levels targets in the range of 34,000 levels on medium term perspectives.

11,000/11,500 and 12,000 level 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 stock specific buying opportunity for medium to long term investment perspectives till medium term reverses. Market will remain volatile ahead of Lok Sabha election outcome this month.

Momentum indicators Daily KST & DAILY MACD are, both, in ‘sell’ indicating volatility for short term. 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 sharp correction till 10,300 levels on Nifty and 34,400 levels on Sensex in short term.

Stock Picks:

JSPL– BUY
 

CLOSE – Rs 182.85
 

TARGET – Rs 193/200
 

The stock closed weekly in positive territory. Its weekly momentum indicators are in BUY. Its managed to hold crucial support of 40 DMA. Its looks like end of short term correction. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 166 for the target of 193/200 levels in short term.
 

RAYMOND – BUY
 

CLOSE – Rs 760
 

TARGET – Rs 795/820
 

It closed weekly in positive territory. Its looks like end of short term correction. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 735 for the target of 795/820 levels in short term.
 

FEDERAL BANK – BUY
 

CLOSE – Rs 97.70
 

TARGET – Rs 103/107
 

The stock closed weekly in positive territory. Its closed above 20 DMA. Its weekly momentum indicators are in BUY. Its looks like end of short term correction. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 92 for the target of 103/107 levels in short term.
 

BEL – BUY
 

CLOSE – Rs 88.30
 

TARGET – Rs 94/100
 

BEL closed weekly in positive territory. Its looks like end of short term correction. 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 85.40 for the target of 94/100 levels in short term.

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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.