Stock tips from Devang Shah of Sharekhan; Buy HPCL, IFCI, RCom

Here is a list of top three trading ideas and strategies from Devang Shah of Sharekhan for the coming week

NIFTY

CLOSE- Rs 7781.90 (04.12.2015)

The Nifty closed weekly in negative territory. It faced resistance at higher levels & missed first short term targets of Rs 8000 levels as expected last week by few points. It made a high of Rs 7979.30 levels so far in recent pull back rally. It closed 3rd consecutive day in negative territory. It has broken crucial swing support/reversal levels of Rs 7812.65 levels on nifty & 25,703.86 levels on sensex & closed below it at the end of weekly trading session, confirming short term trend reversal. Weekly negative close on main index is an additional confirmation for end of abc pull back rally of Wave-B & beginning of wave-C of Z down from overall wave count perspectives.

Short term out look for the market remains negative till nifty trades below Rs 7980 levels & expecting targets in the range of Rs 7700-7539 levels in short term. Medium term outlook for the market still remains negative till nifty trades below 8655 levels & expecting targets in the range of Rs 7420-6950 levels from medium term perspectives.

Recent fall can be counted as impulsive on hourly chart of nifty, sensex & Bank nifty as well. Its giving further confirmation to conclude end of wave-B pull back rally till short term reverses.

All the other indices such as mid cap, Bankex etc except BSE Small cap closed weekly in negative territory. It also implies that broader market is still out performing at current levels. It has to give up at these levels for further confirmation of Trend reversal.

Sensex & Nifty also completed 2 weeks positive cycle, i.e. minimum requirement for wave-B pull back rally. Therefore, this week negative close is an additional confirmation to conclude short term trend reversal at current levels of market.

Momentum indicators daily KST & Daily MACD both are in BUY, not supporting Short term view, may create volatility in short term ahead of Major event of FED Rate Policy & passing of GST in winter session of parliament this month. Close above short term reversal levels will lead to rally towards 8120-8150 levels in short term. One should be stock specific & follow the trend with stop loss levels till it reverses.

Stock Picks:

RCOM: BUY

CMP: Rs 81

Target: Rs 85/89

ROCM closed weekly in positive territory. It’s out performing in short term. It closed above 20 DMA. Its momentum indicators are in BUY. One can BUY with Stop Loss of Rs 75.65 for the target of Rs 85/89 in short term.

IFCI: BUY

CMP: Rs 27.45

Target: Rs 29/30

IFCI closed weekly in positive territory. It has still wave-V UP pending as per daily chart. It closed above 20 DMA. Its momentum indicators are in BUY. Risk Reward is favourable to BUY at current levels. One can BUY with Stop Loss of Rs 27.20 for the target of Rs 29/30 in short term.

HPCL: BUY

CMP: Rs 821.65

Target: Rs 856

HPCL closed weekly in negative territory. It has still wave-V up pending as per daily chart. Its momentum indicators are in BUY. Risk Reward is favourable to BUY at current levels. It closed above 20 DMA. One can BUY with Stop Loss of Rs 817 for the target of Rs 856 in short term.

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

The author is Portfolio Manager- PRO TECH-PMS at Sharekhan