Short-term outlook for the market remains positive: Devang Shah

NIFTY      

CLOSE- 10331.60 (06.04.2018)

The market closed 2nd consecutive week in positive territory. It’s able to hold crucial support near 10100 levels on Nifty. It made a high & low of 10350.50 levels & 10111.30 levels respectively on Nifty during the week. As anticipated, we have seen rally till 10300-10350 range so far on Nifty this week. By looking at broader structure, I am concluding as “end of short-term wave-iv correction/ short-term bottom & beginning of wave-v upward rally towards higher levels targets in the medium term”. One should expect the markets to trend towards higher levels targets as mentioned below in short-term till it reverses. 

It looks like the markets has completed short-term correction near the recent low of 9951.90 levels on Nifty & 32,483.84 levels on Sensex. It has almost retraced almost 38.2% near recent lows in these short-term correction as per chart attached. It looks like the beginning of wave-I of 5 as per chart attached as per preferred wave counts with ruling out the possibility to break recent lows as mentioned above till short-term reverses.

On the other hand, break of short-term reversal levels will only open up the possibility of Alternate-II wave count possibility as per chart attached which is not my preferred one at current levels of the market for short-term.

The short-term outlook for the market remains positive till Nifty trades above 10111 levels and expecting targets in the range of 10500-10650 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 8,968 levels and expecting targets in the range of 12000-12200 levels in the medium term.

Time wise also market has completed wave-IV correction till March End as mentioned earlier. Many stocks particularly of broader market is also showing strength & strong signal of end of short term correction. Other indices such as midcap, small cap & Bank nifty is also showing strength & also giving strong sign of end of short term correction. Global Market particularly, US Market also showing sign of end of short term correction. Therefore, many of the evidences giving sign of short term bottom. Trader should strictly follow trend till it reverses. 

BANK NIFTY also closed 2nd consecutive weekly in positive territory. It looks like end of short term correction near recent low of 23631.20 levels. It has almost retraced almost 38.2% near recent lows in these short term correction as per chart attached. It has perfectly able to hold lower end of REVERSE PARALLEL CHANNEL as per chart attached, giving strong indication of short term bottom. It looks like beginning of wave-I of 5 as per chart attached as per preferred wave counts with ruling out possibility to break recent lows as mentioned above till short term reverses. 24,115.80 levels is strong support/Reversal levels for short term & One can expect higher levels targets around 25800 levels in short term and 29600-30000 levels in medium term.

On the other hand, break of short term reversal levels will only open up possibility of Alternate-II wave count possibility as per chart attached which is not my preferred one at current levels of market for short term. 

10000 & 10700 levels is strong support & resistance levels range respectively based on option open interest data so far for next month series. Market will remain very volatile ahead of Result season this month. Any kind of such short term correction or consolidation is buying opportunity for medium to long term Investment perspectives till medium 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. Close below short term reversal levels will lead to sharp correction till 9950-9800 levels on Nifty & 32400-31800 levels on Sensex in short term.

Stock Picks: 

DHFL BUY

CLOSE: Rs 538.20

TARGET: Rs 565/590

DHFL closed weekly in positive territory. It’s outperforming in short term. Its daily momentum indicators are in BUY. One can BUY with stop loss of 490 for the target of 565/592 levels in short term.

BUY BATA
 

CLOSE: Rs- 772.15

TARGET: Rs 796/810

BATA closed weekly in positive territory. It’s outperforming in short term. Its daily momentum indicators care BUY. Risk reward is favorable to BUY at current levels. One can BUY with a stop loss of Rs 740 for the target of Rs 796/810 in short-term. 

BUY NALCO
 

CLOSE: Rs-70.85
 

TARGET: Rs 75/80
 

NALCO closed the weekly in positive territory. It’s outperforming in short term. Its daily momentum indicators care BUY. Risk reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs 66.50 for the target of Rs 75/80 in short-term. 

BUY L&T
 

CLOSE: Rs 1318
 

TARGET: Rs 1370
 

L&T closed the weekly in positive territory. It looks like end of medium term correction. Its daily momentum indicators care BUY. Risk reward is favorable to BUY at current levels. One can BUY with a stop loss of Rs 1290 for the target of Rs 1370 in short-term. 

BUY ESCORTS
 

CLOSE: Rs- 905.90
 

TARGET: Rs 945/960
 

ESCORTS closed the weekly in positive territory. It’s outperforming in short term. Its daily momentum indicators care BUY. Risk reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs 869 for the target of Rs 945/960 in short-term. 
 

Disclaimer: The analyst may / may not have a position in the scrips mentioned above; the views given above are the personal views of the analyst.Consultant & Advisors in the world of Financial