<b>Devang Shah:</b> Sell RIL, LIC HF, Tata Motors, Hero Motocorp

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

NIFTY

CLOSE-8065.82 (31.10.2015)

Nifty closed first weekly negative close after consecutive preceding four weekly positive closes. It closed 5th consecutive day in negative territory. It made a low of 8044.40 levels on nifty & 26,585.20 levels at the end of weekly trading session. It failed to sustain at higher resistance levels and warning sign already mentioned in last weekly update.

 It extended in recent correction as expected & broken crucial support of 8088 levels on nifty & 26,713.28 levels on sensex. We have seen extended impulsive hourly charts fall till lower end of channel on both sensex & Nifty on daily chart. It’s also reached close to lower Bollinger band i.e. around 8010-8000 levels on nifty & 26,430 levels on sensex . One should watch out market behaviour around these levels for any kind of full back rally in short term. Daily positive closed will be a first confirmation for any kind of pull back rally in short term. Failed to hold around these levels will lead to sharp fall towards lower levels targets in short term. 

Short term outlook for the market remains negative till nifty trades below 8336 levels & expecting targets in the range of 7870-7960 levels in short term. Medium term out look for the market remains negative till nifty trades below 8655 levels as mentioned many times in weekly write up earlier & expecting targets in the range of 7420-6950 levels in medium term.

 All the indices also closed weekly in negative territory, confirming end of ABC Pull back rally & Beginning of wave-Z down towards lower levels targets in short to medium term.

 It also looks like Bearish Head & Shoulder kind of pattern on nifty/ Sensex & Midcap & Small cap indices as well. In that case we may see some kind of consolidation or pull back from these levels before next round of further selling starts like an earlier instance. Midcap & small cap indices also closed at 40 DMA, till it holds possibility of right shoulder is open, failed to hold it, will lead to sharp fall in broader market in coming trading session. One should also watch out these indices behaviour in coming trading session. 

CNX BANKEX is also showing 5 wave declines as per hourly charts . It has given daily positive close on Friday’s trading session. IT made a low of 17199.30 levels. Till it holds, we may see possibility of consolidation or pull back rally in short term. Break of it will confirm further extension of recent fall with out any kind of pull back rally. One should also watch out CNX BANKEX behaviour for short term.

Momentum indicators daily KST & Daily MACD both are in SELL supporting short term trend. Close above short term reversal levels will lead to possibility of rally till 8360-8400 levels in short term. One should be stock specific & follow the trend till it reverses

Stock Picks:

RIL-SELL

CMP- Rs 947.85

TARGET- Rs 910
 

RIL closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. It can extend for wave-C down in short term. One can SELL with Stop Loss of Rs 974 for the target of Rs 910 levels in short term.

LIC HSG-SELL

CMP- Rs 480.10

TARGET- Rs 469/460
 

LIC HSG closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. One can SELL with Stop Loss of Rs 491 for the target of Rs 469/460 levels in short term.

TATA MOTORS-SELL

CMP- Rs 384.45

TARGET-Rs 360/351
 

TATA MOTORS closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. One can SELL with Stop Loss of Rs 397 for the target of Rs 360/351 levels in short term.

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HERO MOTOCORP-SELL

CMP - Rs 2585

TARGET-Rs 2493
 

HERO MOTOCORP closed weekly in negative territory. Its Daily momentum indicators are in SELL. Risk reward is favourable to SELL at current levels. One can SELL with Stop Loss of Rs 2665 for the target of Rs 2493 levels 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