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

The short-term outlook for the market remains positive till Nifty trades above 10557 levels and expecting targets in the range of 11600 levels in short-term, says Devang Shah.

NIFTY      

CLOSE- 11018.90 (13.07.2018)

The market closed the 2nd consecutive week in positive territory. It finally managed to break the short-term consolidation range of past couple of weeks on the upside as expected. It finally confirms wave-III of 5 on the upside on main indices nifty & Sensex. It finally achieved my short term targets levels near recent high as expected earlier. It made a high of 11,071.40 levels so far in this rally. One can expect the market to extend further on upside towards higher levels targets as mentioned below in short to medium term. Any kind of short-term consolidation or correction is stock specific buying opportunity till short-term reverses.

I am concluding the end of wave-II of 5  as flat correction or consolidation of past couple of weeks on main indices nifty/Sensex as mentioned earlier. And main indices (Nifty/Sensex) already confirmed wave-III of 5 beginning after the break out from range. Sensex is the first index to make all-time high after 5 months of correction since January 2018. It made an all-time high of around 36,739.88 levels during the week. 

The short-term outlook for the market remains positive till Nifty trades above 10557 levels and expecting targets in the range of 11600 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.

There is still strong divergence is going on between Nifty/Sensex main indices & Broader Market in short-term And we have seen a sharp selloff particularly in the broader market in near term. I feel this divergence is going to end soon And we will see a strong rebound in the broader market. These broader market indices have to catch up with main indices nifty/Sensex & join this party of wave-5. This correction is an opportunity to BUY quality beaten down stocks of midcap & small cap index from medium to long-term perspectives. 

BANK NIFTY closed the 2nd consecutive week in positive territory. It has also broken out of consolidation range. Its also extending on upside towards higher levels targets in short to medium term. It made a high of 27,153.10 levels so far in this rally.  26000 levels are strong support for bank nifty for short term until it holds one can expect higher levels targets till 27700 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. 

10600/10800 & 11000/11200 levels are strong support & resistance levels respectively based on option open interest data for current month series expiry perspectives. By looking at current structure, I feel the market is going to surpass all-time high soon across all 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 & DAILY MACD both are in BUY supporting the 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 10300-10200 levels on nifty & 33600 levels on Sensex in short term.

Stock Picks: 

GRANULES INDIA- BUY

CLOSE– Rs 89.25

TARGET– Rs 102-105
 

GRANULES INDIA closed the weekly in positive territory. It’s showing sing of extension in short term. Its daily momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs-76 for the target of Rs 102-105 levels in short-term. 

DCB BANK - BUY

CLOSE– Rs 179.90

TARGET– Rs 190-200
 

DCB closed the weekly in positive territory. It's outperforming in short term. Its daily momentum indicators are in BUY.  Risk reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs-170 for the target of Rs 190-200 levels in short-term. 

L&T FIN- BUY

CLOSE– Rs 148.80

TARGET– Rs 155-160
 

L&T FIN closed the weekly in negative territory. It's trading near medium term important support levels. Risk Reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs-144 for the target of Rs-155-160 levels in short-term. 

Devang Shah: The author of www.trendtechno.com (Trade with Trend) and an independent market analyst.

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