Short term outlook for the market remains positive: Devang Shah

One should buy stock specific at current levels or any kind of decline or consolidation & follow the trend till it reverses

NIFTY

CLOSE- 8170.05 (10.06.2016)

Market closed weekly in negative territory. It further consolidated in thin range of around 100 points on nifty with high volatility for the entire week. It made a high of 8294.95 levels on nifty & 8162.85 levels during week. It still looks like “Halt but not top” at current levels of market. One should expect market to trend towards higher levels targets in short term till it reverses.

Short term wave counts of both nifty & Bank nifty is still not very clear at current levels of market. We can see 2 alternate possibilities at current levels of market. Both are indicating bullish possibility till trend reverses. Stocks are still showing strength at current levels of market.

From overall wave count perspectives its still not very clear that its beginning of new bull run from bottom of around Feb-2016 or its corrective trend at current levels of market. But conclusively Overall trend it still UP, whether its corrective or impulsive, best way to deal with it, is to Trail it till it reverses both from short to medium term perspectives for participating entire move. And we will see market behaviour at higher targets levels as mentioned below to reach further conclusion on the same.

Short term outlook for the market remains positive till nifty trades above 8030 levels & expecting target of 8336 levels in short term. Medium term out look for the market remains positive till nifty trades above till nifty trades above 7715 levels & expecting targets in the range of 8640-8844-9120 levels in medium term.

Bank Nifty is also outperforming in this rally. It has achieved my short term target of 18,000 levels as expected last week. It made a high of 18,026.80 levels. It still looks like possibility of further up move from wave count perspective on Bank nifty as per chart attached. It’s overall out looks remains positive till it trades above 17100 levels & expecting targets in the range of 18800-18900 levels in short to medium term. 17300 is crucial support for bank nifty for short term.

Momentum indicators daily KST went in to SELL but daily MACD is still in BUY supporting short term trend. 8134/8077 levels on nifty & 26,561/26,405 levels on sensex are strong support levels for short term. One should BUY stock specific at current levels or any kind of decline or consolidation & follow the trend till it reverses.

8100 & 8300/8400 looks strong support & resistance levels respectively from derivate option open interest data for short term. It may consolidate in range further ahead of Fed meet next week.

Stock Picks:

HINDALCO: BUY

CMP: Rs 115.65

Target: Rs 128
Stop Loss: Rs 108
 

HINDALCO closed weekly in Positive territory. It’s out performing in short term. Its daily momentum indicators are in BUY. It has started wave-C or wave-III Up. Risk reward is favourable to BUY at current levels. 
 

VEDANTA:  BUY

CMP; Rs 109.70

Target: Rs 130
Stop Loss: Rs 109.70
 

VEDANTA closed weekly in Positive territory. It started wave-III or wave-C Up. It closed above 20 DMA. Its daily momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. 
 

BEL:  BUY

CMP: Rs 1,265.35

Target: Rs 1,330/1,360
Stop Loss: Rs 1,220
 

BEL closed weekly in positive territory. It has wave-V up pending on daily chart. Its daily momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. 

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.

c