Market will remain volatile ahead of Union Budget: Devang Shah

Short term outlook for the market remains positive till Nifty trades above 8,416, says Devang Shah

NIFTY
CLOSE- 8641.25 (27.01.17)
 
Nifty closed weekly in positive territory. It sharply bounced back from lower levels & managed to hold above medium term reversal levels at the end of weekly trading session beyond anticipation. It made a low of 8,327 levels. It has surpassed & closed above last weekly negative close high of around 8462 levels & confirmed short term trend reversal during week. All the other indices also closed weekly in positive territory. One should expect BULLS party to rock further for higher levels targets in short to medium term.
 
As I was anticipating medium term correction before beginning of further rally on upside but market finally confirmed end of medium term correction at lower levels of 7,893 levels on Nifty & now further closed above medium term reversal of 8,600 levels on Nifty, it looks like beginning of wave-III of V UP as per long term wave count.

 

Short term outlook for the market remains positive till Nifty trades above 8,416 levels & expecting targets in the range of 8,920-8,968 levels in this short term correction. Medium term outlook for the market remains positive till Nifty trades above 7,893 levels & expecting target of 10,000 levels on Nifty in medium term.
 
Nifty Bank also confirmed medium term reversal. It retraced also 38.2% in these overall medium term correction. It also shows wave-III beginning as per short tern wave counts. One can expect higher targets of around 20,500 levels in short term. 18,900 is strong support for short term. One can expect higher levels targets till 26,800-27,000 levels in medium term. Broader market is also showing sign of strength, its good sign supporting overall trend.

 
As mentioned many times in my weekly update that buy stock specific on dips which turned out to be favourable for investor, because in current scenario, market has not completed full medium term correction which I anticipated & started to rally with lower retracement in this correction. But one fact I am reiterating once again that we are in long term bull market so focus of systematic value buying in stocks in any kind of medium term correction or consolidation stage turned out to be reward able in terms of entry opportunity.
 
Market will remain volatile ahead of budget event this week. 8,400-9,000 looks strong support & resistance levels respectively & also range for this month based on derivative option open interest data. 

 
Momentum indicators daily KST & daily MACD both are in BUY supporting short term trend. One should buy stock specific at current levels or any kind of decline or consolidation till overall trend reverses.
 
Stock Picks:
 
CEAT- BUY
CLOSE-1205.30
Target-1245/1300
CEAT closed weekly in positive territory. It’s outperforming in short term. It looks like end of medium term correction. Its momentum indicators are in BUY. It also closed above 40DMA. Risk reward is favourable to BUY at current levels. One can BUY with SL-1157 for the targets of 1245/1300 in short term
 
CONTAINER CORP- BUY
CLOSE-1203.20

Target-1240/1274

Container Corp closed weekly in positive territory. It’s out performing in short term. Its weekly momentum indicators are in BUY. It closed above 40 DMA. Risk reward is favourable to BUY at current levels. One can BUY with SL-1160 for the target of 1240/1274 in short term.
 
TATA ELXSI-BUY
CLOSE-1472
Target-1750

TATA ELXSI closed weekly in negative territory. It’s out performing in short term. Its weekly momentum indicators are in BUY. It closed above 20 DMA. Risk reward is favourable to BUY at current levels. One can BUY with SL-1350 for the target of 1750 in short term.

 
ESCORTS-BUY
CLOSE-371.30
Target-390/424
 
ESCORTS closed weekly in positive territory. It’s out performing in short term. Its weekly momentum indicators are in BUY. It closed above 20 DMA. Risk reward is favourable to BUY at current levels. One can BUY with SL-343 for the target of 390/424 in short term.
 
 
Devang Shah is 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.