Short term outlook for the market remains positive: Devang Shah

NIFTY
CLOSE- 7761.95 (18.12.2015)

The Nifty closed weekly in positive territory. It failed to extend on down side as anticipated last week. It made a low of 7551.05 levels in recent correction & formed double bottom kind of pattern.
It found support around these levels & started to rise from these levels. It looks like impulsive wave structure on hourly charts of nifty from recent lows. One can expect market to trend towards higher levels targets levels till short term trend reverses. All the other indices such as midcap, small cap & Bankex etc also closed weekly in positive territory. One should buy stock specific in any kind of decline or consolidation till short term reveres.

Short term out look for the market looks remains positive till nifty trades above 7551 levels & expecting targets in the range of 7980-8168-8337 levels in short term. Medium term out look still remains negative till nifty trades below 8337 levels. 7720-7640 levels are important support levels for short term.

 From overall wave counts perspectives, we are having 2 alternates at current levels of market. In case of alternate-1, we may have completed TIME wise Triple ZIG ZAG correction & we have started UP trend towards higher levels targets probably Life time higher levels. And In case of second alternate, we are still forming wave-X of double ZIG ZAG correction which may retrace till short term targets levels as mentioned above. My preferred one is alternate-2, will review it further if medium term trend reverses.

 Momentum indicators daily KST & Daily MACD both are in BUY, supporting short term trend. Close below short term reversal levels will lead to sharp correction till 7380 levels in short term. One should be stock specific & follow the trend with stop loss levels till it reverses.

Stock Picks:

TATA STEEL- BUY

CMP - Rs 256
TARGET- Rs 268/ Rs 288

TATA STEEL 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-248 for the target of 268/288 in short term.

BHEL- BUY

CMP - Rs 166.56
TARGET- Rs 178

BHEL closed weekly in positive territory. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with SL-163 for the target of 178 in short term.

ONGC - BUY

CMP - Rs 224
TARGET- Rs 238

ONGC 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-218 for the target of 238 in short term.

BHARTI - BUY

CMP - Rs 321

TARGET- Rs 343

BHARTI 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-304 for the target of 343 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