 "Stock picks from Devang Shah; sell Tata Steel, Hindalco")
Here are a few trading ideas from Devang Shah, the author of www.trendtechno.com:
Nifty Outlook
Nifty closed 4th consecutive week in negative territory. It extended correction on down side as expected last week. It’s extending slow but steady correction on down side after sharp fall in first day of beginning of last week. It made a low of so far 8,048.30 levels on nifty on Friday’s trading session. It has strong support around 8,000 levels, break of it will lead to further sharp fall towards short term targets levels as mentioned below in near term. Trader should use any kind of pull back rally is selling & exiting opportunity for short term.
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It looks like wave-c of (Y) from wave count perspectives on Nifty & Sensex main indices. Nifty Bank also started to show weakness. One can expect further sharp fall on Bank Nifty in short term for the lower levels targets of around 18200-17900 levels in short term. All the other indices such as midcap, small cap & bank nifty closed weekly in negative territory.
Short term outlook for the market still remains negative till Nifty trades below 8,470 levels & expecting targets in the range of 7,927-7,850 levels in this short term correction. Medium term outlook for the market remains negative till Nifty trades below 8,737 levels & expecting targets in the range of 7,600-7,300-7,000 levels in medium term.
BSE 500 charts is showing better overall & short term wave counts among all indices. It looks like clear abc pull back rally post budget 2016 this year from bottom of march 2016. Although BSE 500 indices made new high with top triangle distribution pattern in wave-v of C, one can expect over all lower levels targets till 9,000 levels on it in this wave-(Y) of II correction in short to medium term before wave-III Up starts. One should partially book profit & buy stock specific in tranches in systematic way in this correction from medium to long term perspectives.
Derivative option open interest data in also indicating 8,000 is strong support for current month expiry perspectives. And 8,200-8,300 levels is strong resistance levels on upside for this month. One should watch out market behaviour around 8000 levels for any kind of pull back rally, break of it will lead to sharp fall towards short term targets levels without any kind of pull back rally.
Momentum indicators Daily KST & Daily MACD both are in sell showing weakness. One should use any kind of pull back rally to sell or exit till short term trend reserves. One should be stock specific & follow the trend with trail stop loss levels till it reverses.
TATA STEEL
Reco: SELL
Close: Rs 385
Target- Rs 363/355
The company closed weekly in negative territory. It also closed below 20 DMA. Its momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. One can SELL with SL- Rs 418 for the target of Rs 363/355 in short term.
HINDALCO
Reco: SELL
Close: Rs 166
Target: Rs 150/147
Hindalco closed weekly in negative territory. It looks like end of 5 wave advance rally on daily chart. Its momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. One can SELL with SL- Rs176 for the target of Rs150/147 in short term.
EICHER MOTOR
Reco: SELL
Close: Rs 21,792
Target: Rs 19,500
Eicher Motor closed weekly in negative territory. It looks like end of wave-IV pull back rally over on daily chart its momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. One can SELL with SL- Rs 22,900 for the target of Rs 19,500 in short term.
OIL INDIA
Reco: BUY
Close: Rs 418
Target: Rs 434
OIL closed weekly in negative territory. It’s out performing in short term. Its daily momentum indicators are in BUY. It looks like beginning of wave-V up rally on weekly chart. One can BUY with SL- Rs 397 for the target of Rs 434 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.
Devang Shah is the author of www.trendtechno.com (Trade with Trend)
