Expect Nifty to trade in 8,800-9,200 zone in expiry week, says Devang Shah

Nifty may consolidate in the range of 8,930-9,200 in short-term before further up trend resumes

NIFTY

CLOSE- 9,108 (24.03.17)

Nifty closed the week in a negative territory. It witnessed profit booking during the week after achieving short-term targets levels as expected last week, from new record high levels on Nifty index. It made a high of 9218.40 so far in this rally. It made a low of 9019.30 during the week and further bounced back from lower levels. It found support near physiological support of 9000 levels ahead of expiry next week. Weekly negative close on main indices (Nifty/Sensex) indicating completion of 5 wave advance rally. Will it extend from here on i.e. to watch out in the coming week, but based on my experience, once again reiterating the same thing to follow simple “DOW THEORY” in short-term as well in such kind of extended up trend market. Therefore, it’s advisable to be stock specific and simply follow the trend with revised stop loss levels till it reverses. 

It may consolidate in the range of 8930-9200 on Nifty in short-term before further up trend resumes as per scenario-1. Alternatively, it may extend from here on till nifty trades above 9,000 as per scenario-2. One should closely watch out market behaviour in the coming week to get a further clue on market for short-term. But conclusively, in both scenario, any kind of decline or consolidation is buying opportunity till short-term reverses. 

BANK NIFTY has a similar wave count like Nifty/Sensex indices for short term. One can expect higher levels targets of 21,600-22,000 in short-term in case of extension. 20,494 is strong support and reversal levels for short term. One should also trail it with revised stop loss levels till it reverses.

Short-term outlook for the market remains positive till Nifty trades above 8,860 levels and expects targets in the range of 9240-9,260 (0.618% of wave-I) in short-term. Sustaining above 9,260 will only confirm further higher levels targets till 9,500 levels (i.e. - Wave-I = Wave-V). Short-term trader should closely watch out market around these levels. One can’t rule out profit-booking from current levels, therefore it’s advisable for short-term trader to book profit at regular intervals.

Broader market such as midcap and small cap indices is still outperforming at current levels of market but it has to support main indices to finally conclude extension of rally from here on. Without support of Sensex/Nifty, it will not be a strong rally lasting for more time in near term. Therefore, one should closely watch out market behavior at current levels.

8,800-9,200 is strong support and resistance levels on Nifty respectively based on derivative option open interest data for expiry perspectives next week. Any kind of short term correction or consolidation is buying opportunity for medium to long term investor. One can expect higher levels targets in medium to long-term.

Momentum indicators Daily KST & daily MACD both are in SELL indicating weakness but one should be stock specific and 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 correction till 8,700-8,680 levels on Nifty & 28,102 levels on Sensex in short-term. 

Stock Picks:

TATA CHEMICALS –BUY

CLOSE-Rs 578

Target- Rs 600-610

Tata Chemicals closed the week in positive territory. It looks like an extension in wave-V in short term. Its momentum indicators are in BUY. It also closed above 20 DMA. Risk reward is favourable to BUY at current levels. One can BUY with SL-560 for the target of 600-610 levels in short term

PIDILITE INDUSTRIES- BUY
 

CLOSE- Rs 689

Target- Rs 710-728

Pidilite Industries closed the week in a positive territory. It is outperforming in short-term.I t closed above 20-DMA. Risk reward is favourable to BUY at current levels. One can BUY with SL of Rs 676 for the target of Rs 710-728 levels in short term.

GODREJ INDUSTRIES-BUY
 

CLOSE-Rs 491

Target-Rs 525-530

GODREJ INDUSTRIES closed the week in negative territory. It’s consolidating in narrow range. It’s momentum indicators are in BUY. It closed above 40-DMA. It has still wave-V up pending in short term. Risk reward is favourable to BUY at current levels. One can BUY with SL of Rs 475 for the target of Rs 525-530 in short term.

CESC-BUY

CLOSE-827.85

Target-875-885

CESC closed the week in negative territory. It’s consolidating in narrow range. Its momentum indicators are in BUY. It closed above 40-DMA. It has still wave-V up pending in short-term. Risk reward is favourable to BUY at current levels. One can BUY with SL of Rs 793 for the target of Rs 875-885 in short-term

PNB-BUY
 

CLOSE- Rs 141.35

Target- Rs155-165

PNB closed the week in negative territory. It managed to hold lower-end support on daily chart. It’s weekly momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with SL of Rs 133 for the target of Rs 155-165 in the short-term.

Devang Shah: The author of www.trendtechno.com (Trade with Trend)

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.