Short-term trend looks positive till Nifty trades above 9,685: Devang Shah

At least for immediate short-term, recent lows of 31,128 on Sensex is strong support zone

NIFTY      

CLOSE- 9794.15 (14.08.17)

Indices, particularly midcap and small caps, witnessed sharp decline from higher levels in the last week. We have seen first weekly negative close on main index after preceding consecutive five weeks of positive close. It still looks like one more leg on upside is still pending in short term till short term reverses. Alternatively, failing to sustain at higher levels will lead to range-bound trend between 9,500-10,000 levels on Nifty in the short term. Any kind of decline is a stock specific buying opportunity from short to medium term perspective.

Midcap & Small cap index looks completed wave-C of IV in these sharp correction as per chart attached. It has still wave-V of 3 is pending as per chart attached. It may show some outperformance if main index remains in range. One should closely watch out the behaviour of these indices in the short term to get some more clue of market.

Short-term outlook for the market remains positive till Nifty trades above 9,685 levels and is expecting target of 10,400 levels in the short-term. Medium-term outlook for the market remains positive till Nifty trades above 8,968 levels and is expecting targets in the range of 12,000-12,200 levels in the medium term.

Market is still holding Dow Theory support on weekly charts. As mentioned many times in my updates about relevance of such supports in these kind of extended markets. At least for immediate short term, recent lows of 9,685 on Nifty and 31,128 on Sensex are strong supports for trading perspectives.

9,500-10,000 levels are in strong support & Resistance levels respectively on Nifty based on derivative option open interest data for expiry perspectives next week. Any kind of decline or short term consolidation is buying opportunity for medium to long term perspectives till medium term reverses.

Bank Nifty also closed the week in a negative territory. We have seen profit-booking on Bank Nifty from higher levels. One more leg on upside is still pending towards short term target levels till it reverses. Alternatively, It may also remain in range in the short-term. It has strong support around 20,649 levels till it holds one can expect higher levels targets till 27,000 levels in the medium term as per chart attached.

Momentum indicators Daily KST & daily MACD both are in SELL showing weakness but one should be stock specific & follow the trend with trail stop loss levels till it reverses from trading perspectives. Close below short term reversal levels will lead to possible sharp price-wise correction till 9,270/9,000 levels on Nifty & 29,800/29,200 levels on Sensex in short term. 

Stock Picks:

CESC – BUY

CLOSE – Rs 941

TARGET – Rs 1000

CESC closed the week in a positive territory. It has still wave-V up pending on daily chart.  It managed to hold 40 DMA. Risk reward is favorable to buy at current levels. One can buy with a stop loss of Rs 900 for the target of 1000 levels in short term.

NALCO - BUY

CLOSE – Rs 65.80

TARGET – Rs 73-75

NALCO closed the week in negative territory. Its outperforming in short-term. It has completed short term correction. Risk reward is favorable to buy at current levels. One can buy with stop loss of 61 for the target of 73-75 levels in short term.

YES BANK - BUY

CLOSE – Rs- 1777

TARGET – Rs 1900

YES BANK closed the week in negative territory. It managed to hold 20-DMA as per daily chart. Risk reward is favorable to buy at current levels. One can buy with stop loss of 1700 for the target of 1900 levels in short term.

IOC- BUY

CLOSE – Rs 420

TARGET – Rs 440-450

IOC closed the week in negative territory. It is outperforming in short term. It has completed short term correction. Risk reward is favorable to buy at current levels. One can buy with stop loss of 389 for the target of 440-450 levels in short term.

ASHOK LEYLAND- BUY

CLOSE – Rs 105

TARGET – Rs 112-114

ASHOK LEYLAND closed the week in negative territory. Its outperforming in short term. It has completed short term correction. Risk reward is favorable to buy at current levels. One can buy with stop loss of 98.80 for the target of 112-114 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; the views given above are the personal views of the analyst.Consultant & Advisors in the world of Financial Market.

Disclaimer: The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.