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

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, says Devang Shah.

NIFTY      

CLOSE- 10596.40 (18.05.2018)

The market was showing sign of extension last week but failed to sustain at higher levels. It made a high of 10929.20 levels on nifty & 35993.53 levels on Sensex during the week. It faced resistance & Profit booking at higher levels & closed weekly in negative territory at the end of the weekly trading session. It looks like wave-II correction as preferred wave count at current levels of the market. Any kind of decline or short-term consolidation is stock specific buying opportunity till short-term reverses. One can expect higher levels targets as mentioned below in short to medium term.

It looks like wave-II Correction possibility as preferred wave count as per chart attached as of now. Alternatively, if it turned out to be Wave-X rally, then we can see one sharp price wise correction before resuming final uptrend towards higher levels targets as mentioned below in medium term.

The short-term outlook for the market remains positive till Nifty trades above 10279 levels and expecting targets in the range of 10900-11000 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.

BANK NIFTY closed weekly in negative territory. It’s outperforming at current levels of the market. It made a high of 26,926.70 levels so far in this rally. It looks like a more clear bullish set up of either wave-ii or wave-iv correction as per chart attached. One can expect higher levels targets around 27700 levels till it holds the crucial support of 24700 levels in short-term & further above 29600-30000 levels in the medium term. Any kind of decline is also buying opportunity for bank nifty for short to medium term perspectives.

The broader market is underperforming at current levels of the market. It has to participate in this rally to get more clarity about the end of short-term correction or consolidation. One should closely watch out broader market behaviour to take further clue of the short-term trend of the market.

10500 & 11000 levels are strong support & resistance levels range respectively based on option open interest data so far for current month series. The market will remain very volatile ahead of Result season this month. By looking at current structure, I feel the market is going to surpass all-time high soon on main indices & this rally will have time wise consolidation rather than price wise correction in short term. 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 are in sell indicating volatility to continue in short term. 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 613.70

TARGET- Rs 680

DHFL closed weekly in negative territory. It’s consolidating in a range in short term. It’s outperforming in short term. It’s trading above 40 DMA. Its weekly momentum indicators are in BUY. One can BUY with a stop loss of 585 for the target of 680 levels in short term.

AXIS BANK- BUY

CLOSE- Rs 533

TARGET- Rs 560/575

AXIS BANK closed weekly in negative territory. It's trading above 20DMA. Its daily momentum indicators care BUY. Risk reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs 514 for the target of Rs 560/575 levels in short-term. 

YES BANK- BUY

CLOSE- Rs 341.70

TARGET- Rs 370/375

YES BANK closed the weekly in negative territory. It’s consolidating in a range in short term. Its weekly momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs 320 for the target of Rs 370/375 levels in short-term. 

GODREJ IND- BUY

CLOSE- Rs 570

TARGET- Rs 600/620

GODRE IND closed the weekly in negative territory. It looks like wave-II correction & it has wave-III Up pending as per daily chart. Its weekly momentum indicators care BUY. Risk reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs-530 for the target of Rs 600/620 levels in short-term. 

Disclaimer: The analyst may / may not have a position in the scrips mentioned above.