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

Short-term outlook for the market remains positive till Nifty trades above 10,279 levels and expecting targets in the range of 10,900-11,000 levels in short term, says Devang Shah.

NIFTY      

CLOSE- 10605.15 (25.05.2018)

The market closed the week in positive territory after high volatility during the week. It made a low of 10,430.35 levels on nifty & 34,302.89 levels on sensex during week. It looks like possibility of end of wave-II correction as mentioned last week. 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.

Alternatively, Nifty has resistance around 10800-10900 levels, failed to sustain above these levels will open up alternate possibility of Bullish triangular consolidation structure in wave-IV as per chart attached. Its not my preferred alternate at current levels of market but one should closely watchout market behavior at higher levels to finally conclude the same.

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 medium term.

It looks like end of broader market correction with double bottom kind of formation at lower levels. One should expect broader market particularly midcap & small cap index to do well in coming week.

BANK NIFTY closed weekly in positive territory. It’s outperforming at current levels of market. It made a low of around 25,550 levels so far in this correction. It has also found support near lower end of channel as per chart attached. It has still 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 crucial support of 25500 levels in short term & further above 29600-30000 levels in medium term. Any kind of decline is also buying opportunity for bank nifty for short to medium term perspectives. 

10500 & 10800 levels is strong support & resistance levels range respectively based on option open interest data for expiry perspectives next week. Market will remain very volatile ahead of Result season this month. By looking at current structure, I feel 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 616.05

TARGET – Rs 645/680
 

DHFL closed weekly in positive territory. It looks like end of short term consolidation. It’s outperforming in short term. It’s trading above 40 DMA. Its weekly momentum indicators are in BUY. One can BUY with stop loss of 590 for the target of 645/680 levels in short term.

AXIS BANK- BUY

CLOSE – Rs 538.45

TARGET – Rs 560/580
 

AXIS BANK closed weekly in positive territory.Its trading above 20DMA. Its weekly momentum indicators care BUY. Risk reward is favorable to BUY at current levels. One can BUY with a stop loss of Rs 514 for the target of Rs 560/580 levels in short-term. 

YES BANK- BUY

CLOSE – Rs 339.45

TARGET – Rs 360/375
 

YES BANK closed the week in negative territory. It’s consolidating in range in short term. Its weekly momentum indicators are in BUY. Risk reward is favorable to BUY at current levels. One can BUY with a stop loss of Rs 320 for the target of Rs 360/375 levels in short-term. 

L&T- BUY

CLOSE – Rs 1343.80

TARGET – Rs 1380/1420
 

L&T closed the week in positive territory. It’s consolidating in range for short term. It’s holding support of 100 DMA. Risk reward is favorable to BUY at current levels. One can BUY with a stop loss of Rs-1290 for the target of Rs 1380/1420 levels in short-term. 

TATA CHEM- BUY

CLOSE – Rs 732.70

TARGET – Rs 755/780
 

TATA CHEM closed the week in positive territory. Its looks like end of short term correction. Its weekly momentum indicators are in BUY. Risk reward is favorable to BUY at current levels. One can BUY with a stop loss of Rs-707 for the target of Rs 755/780 levels in short-term. 

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