Expect target of 10,400 for Nifty in the short term: Devang Shah

Recommends buying IOC, LIC Housing Finance, Godrej Industries and L&T

NIFTY      
CLOSE- 9857.05 (24.08.17)
 
Market consolidated in narrow range during the week & was able to close second consecutive week in positive. It reached a high of 9,884.35 levels & low of 9,740.10 levels during the week. It managed to hold lower end support/reversal levels as mentioned last week. The Street still looks like one more leg on upside is still pending in short term till it reverses.

Alternatively, failure to sustain higher levels will lead to a range-bound trend between 9,500-10,000 levels on Nifty, in short term. Any kind of decline is stock specific buying opportunity for short to medium term perspective.

 

Short-term outlook for the market remains positive till Nifty trades above 9,685 levels and expecting target of 10,400 levels in the short term. Medium term outlook for the market remains positive till Nifty trades above 8,968 levels and is expecting targets in the range of 12,000-12,200 levels in medium term.
 
Market is still holding on to Dow Throey support on weekly charts. For immediate short term, recent lows of 9,685 on Nifty & 31,128 on Sensex are strong support for trading perspectives.
 
9,500/9,800- 10,000 levels in strong support & resistance levels respectively on Nifty based on derivative option open interest data for expiry perspectives next week. Any kind of decline or short term consolidation is buying opportunity for medium to long term perspectives till medium term reverses.

 
Nifty Bank also closed weekly in positive territory. It managed to hold lower end support of 23,900 levels. It made a low of 23,882 levels It has also one more leg on upside is still pending towards short term targets levels till it reverses. Alternatively, it may also remain in range between 23,900-24,500 levels in the short term. It has strong support around 20,649 levels till it holds one can expect higher levels targets till 27,000 levels in medium term.
 
Momentum indicators Daily KST & daily MACD both are in sell showing weakness but one should be stock specific & 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 price wise correction till 9,480/9,270 levels on Nifty & 30,680/29,800 levels on Sensex in short term.

 
Stock Picks:
 
L&T – BUY
CLOSE – Rs 1,131
TARGET – Rs 1,150/1,180
 
L&T closed the weekly in a positive territory. It looks like end of short term consolidation.  It managed to hold 200 DMA. Risk reward is favorable to buy at current levels. One can buy with a stop loss of Rs 1100 for the target of 1150/1180 levels in short term.
 
GODREJ INDUSTRIES - BUY
CLOSE – Rs 606
TARGET – Rs 625/640
 
Godrej Industries closed weekly in positive territory. It looks like end of short term correction Risk reward is favorable to buy at current levels. One can buy with stop loss of 572 for the target of 625/640 levels in short term.

 
LIC HOUSING FINANCE - BUY
CLOSE – Rs 658
TARGET – Rs 680/690
 
LIC Housing Finance closed weekly in positive territory. It looks like end of short term correction. Risk reward is favorable to buy at current levels. One can buy with stop loss of 635 for the target of 680/690 levels in short term.
 
INDIAN OIL - BUY
CLOSE – Rs 427
TARGET – Rs 440/450
 
IOC closed weekly in positive territory and has been outperforming in the near term. Its weekly momentum indicators are a BUY. Risk reward is favorable to buy at current levels. One can buy with stop loss of 400 for the target of 440/450 levels in short term.

 
Devang Shah is the author of www.trendtechno.com (Trade with Trend) and an independent market analyst
Disclaimer: The analyst may / may not have a position in the scrips mentioned above