Short term outlook for markets remain positive, says Devang Shah

One should be stock specific & watch out market behaviour at these crucial near short term reversal levels

NIFTY

CLOSE- 7563.55 (29.01.2016)

Market was traded in thin range from last 3 trading session after giving evidences in advance of short term reversal as mentioned last week. It finally confirmed short term price reversal to conclude end of correction at recent lower levels. It closed weekly in positive territory after preceding consecutive 3 weekly negative closes at the end of weekly trading session. It looks like impulsive 5 wave advance rise form medium term support of 7,240 levels on nifty & 23,839 levels on sensex, its good sign for BULLS at least from short term perspectives. 

Short term out look for the market remains positive till Nifty trades above 7,240 levels & expect market to trend towards higher levels targets of initially 7,630-7,650 levels on Nifty, its crucial resistance levels to watch out for short term, sustain above it will finally confirm further rally towards 2nd higher levels targets of 7,973 levels in short term.

All the other indices such MIDCAP, SMALL CAP & BANKEX also closed weekly in positive territory. It also looks like Impulsive 5 wave advance rise on these indices after sharp correction from lower levels. Its also good sign for BULLS from short term perspectives till trend reverses.

Its end of complex correction at recent lows of 7,240 levels on nifty & 23,839 levels on sensex . One can expect market to rally initially till 7,972-8,000 i.e. upper end of channel & it’s also coincide with medium term reversal levels. Sustain above it will finally confirm medium term reversal & further higher levels targets of 8,330-8,650 levels on nifty in medium term. One should BUY at current levels & in any kind of decline or consolidation till short term reverses. 

Momentum indicators daily KST & daily MACD both are in BUY supporting short term trend. One should be stock specific & follow the trend with trail stop loss levels till it reverses. Market may remain volatile ahead of RBI Policy next week.

Stock Picks:

TATA MOTORS-BUY

Close-Rs 336.75

Target-Rs 356/370

TATA MOTORS closed weekly in negative territory. It looks like end of medium term correction with ending diagonal kind of pattern in wave-C. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with SL-324.45 for the target of 356/370 in short term.

INFOSYS -BUY

Close-Rs 1163

Taget-Rs 1219/1278

INFOSYS closed weekly in Positive territory. It’s out performing in short term. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with SL-1140 for the target of 1219/1278 in short term.

HDIL-BUY

Close-Rs 73.25

Target-Rs 78/82
 

HDIL closed weekly in positive territory. Its momentum indicators are in BUY. It’s out performing in short term. Risk reward is favourable to BUY at current levels. One can BUY with SL-71.10 for the target of 78/82 in short term.

LIC HOUSING-BUY

Close-Rs 475.55

Target-Rs 490/510

LIC HSG closed weekly in positive territory. Its momentum indicators are in BUY. It’s out performing in short term. Risk reward is favourable to BUY at current levels. One can BUY with SL-469.40 for the target of 490/510 in short term.

The author is Portfolio Manager- PRO TECH-PMS at Sharekhan

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