 "Photo: Shutterstock")
NIFTY
CLOSE: 8261.75 (09.12.16)
Nifty closed the week in positive territory. It managed to hold lower end of channel support and showed signs of further extension of pull back rally for higher levels targets in short term. It made a low of around 8,077 levels on Nifty on day of RBI policy. One should expect market to retrace further till upper end of channel in this pull back rally in short term reverses.
After last week of negative close, I anticipated pull back rally to be over at recent high of 8,251 levels on Nifty but it has taken out this high this week. It is confirming pull back rally to extend further towards higher levels targets in short term before next round of correction begins further for lower levels targets in medium term.
BANK NIFTY closed weekly in positive territory. It also has strong support around 17,980 levels till it holds. One can expect pull back rally till higher levels targets in the range of 18,900-19,200 levels in short term.
Short-term outlook for the market remains positive till Nifty trades above 8,077 levels. I expect targets in the range of 8,350-8,400 levels in short term. Medium term outlook for the market remains negative till Nifty trades below 8,737 levels and expects targets in the range of 7,600-7,300- 7,000 levels in medium term.
All the other indices such as midcap, small cap etc. closed the week in positive territory. It’s outperforming in short term. Broader market particularly NSE MIDCAP is also trading in channel in this pull back rally. One can also expect pull back rally to continue further in broader market in short term.
Market may trade in the range of 8,000-8,400 levels in short term. It will remain volatile ahead of Fed Meet. Stock specific trend on both the direction will continue in this range. Investor should concentrate on outperforming stocks to BUY from medium to long-term perspectives in this correction. One can buy in tranches for better risk management and get a benefit of this correction as well. It will provide an opportunity to enter at every lower level and also not give feeling of being left out. If stocks outperform main index in medium term.
As we are in long-term bull Market, some of the stocks continue to do well in spite of on-going correction on main indices (Sensex/Nifty). Momentum indicators Daily KST and Daily MACD are in BUY supporting the short-term trend. 8000 levels on nifty looks strong support based on derivative option open interest data for this month series in short term. Close below short-term reversal levels will confirm end of pull back rally and beginning of a fresh round of correction for lower levels targets in medium term. One should be stock specific and follow the trend with trail stop loss levels till it reverses.
Stock Picks:
SAIL: BUY
CLOSE: Rs 55
Target: Rs 60/65
SAIL closed weekly in positive territory. It’s out-performing in short term. It has broken out of bullish triangle consolidation pattern. Its daily momentum indicators are in BUY. One can BUY with stoploss of Rs 49 for the target of Rs 60/65 in short-term.
BHARAT FORGE: BUY
CLOSE: Rs 960
Target: Rs 1100/1300
BHARATFORGE closed weekly in positive territory. It’s out-performing in short term. It looks like beginning of wave-III up on weekly chart. Its daily momentum indicators are in BUY. One can BUY with stoploss of Rs 860 for the target of Rs 1100/1300 in short-term
IOC: BUY
CLOSE: Rs 302
Target: Rs 333/352
IOC closed weekly in positive territory. It’s out-performing in short term. It looks like beginning of wave-v up on daily chart. Its daily momentum indicators are in BUY. One can BUY with stoploss of Rs 275 for the target of Rs 333/352 in 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.
