Medium-term outlook on Nifty remains negative, says Devang Shah

NIFTY
 

CLOSE- 8400.35 (13.01.17)

Nifty closed third consecutive week in a positive territory. It has extended pull-back rally further beyond expectation. It has almost achieved short-term target levels in the range of 8,440-8,480 levels near recent highs. It made a high of 8461.05 levels on Friday, and witnessed profit booking from these levels at the end of weekly trading session. All the other indices also closed the week in positive territory.

8,460-8,480 levels are very crucial resistance levels in the short-term. Sustaining above it will confirm extension of pull-back rally for further higher level targets till 8,580 levels in the short-term. Short-term traders should be stock specific and book profit at these levels or trail rest with strict stoploss levels in near term. One should watch out market behaviour at these crucial levels & add long position from trading perspectives if market confirms further extension of short term pull-back rally above recent highs.

Bank Nifty also extended pull-back rally in the short-term. It has strong support around 18300 levels, till it holds it can further stretch towards tgt1-18980 & tgt2-19270 levels in short term. But overall it still looks like pull-back rally only on bank nifty till medium term reverses.

Short term outlook for the market remains positive till nifty trades above 8,220 levels and expecting targets in the range of 8,440-8,480 levels in the short-term correction. Medium term outlook for the market remains negative till Nifty trades below 8,600 levels and expecting targets in the range of 7,600-7,300-7,000 levels in medium term.

Momentum indicators Daily KST & DAILY MACD both are in BUY supporting short-term trend. Medium term outlook for the market still remains negative, till then it looks counter trend pull-back rally. One should stay stock specific and follow the trend till it reverses from trading perspectives to finally conclude end of this pull-back rally. 

Stock Picks:

POWER GRID- BUY

CLOSE: Rs 197.15

Target: Rs 205-210

POWER GRID closed weekly in positive territory. It’s outperforming in short term. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can buy with stoploss of Rs 191.40 for the targets of Rs 205-210 in the short-term.

REC- BUY

CLOSE: Rs 139.55

Target: Rs 148
 

REC closed weekly in positive territory. It’s out-performing in the short term. Its daily momentum indicators are in BUY. Risk reward is favourable to buy at current levels. One can buy with stoploss of Rs 132 for the target of Rs 148 in the short term.

AIA ENG-BUY

CLOSE: Rs 1353.10

Target: Rs 1500

AIA ENG closed weekly in positive territory. It’s out-performing in short term. Its daily momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can buy with stoploss of Rs 1,285 for the target of 1,500 in the 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.