 "Medium term outlook remains positive: Devang Shah")
NIFTY
CLOSE- 8697.60 (07.10.16)
Market closed weekly in positive territory. It has achieved my short term targets levels in the range of 8640-8540 as expected last week near recent lows in this correction. It made a low of 8555.20 levels. It sharply bounced back from this levels but one needs to wait for further confirmation to finally conclude short term reversal.
From wave count perspectives, it looks like complex correction in market in short term. In that case, it may have completed WXY correction near recent lows or it may have one last leg “wave-Z” pending till short term reverses.
Short term outlook for the market remains negative till nifty trades below 8808 levels & expecting targets in the range of 8540-8500 levels in this short term correction. Medium term outlook for the market remains positive till nifty trades above 8294 levels & expecting targets in the range of 9400-9700-10000 levels in medium term.
From FII data & short term actions point of view , there is unwinding of long positions by FII in this correction as a profit booking on derivative front but still buying on cash market is encouraging sign for medium term outlook of market till it proven otherwise.
BANK NIFTY it also looks still in corrective mode having similar wave count like nifty for short term. Short term outlook for bank nifty remains negative till it trades below 19900 levels & expect targets in the range of 19000-18700 levels till short term reverses. Medium term outlook for Bank nifty remains positive till it trades above 18300 levels.
Broader market continued it’s out performance as expected. Midcap & small cap indices closed at higher levels at the end of weekly trading session. There is inter- market divergence between main Indices (NIFTY/SENSEX) & broader market indices (MIDCAP/SMALL CAP) at current levels of market. And Nifty & sensex both closed monthly in negative territory at the end of September month giving some warning sign for end of this ABC (wave-X) pull back rally started from beginning of march-2016 this year But I would watch out further evidences from medium term perspectives till that this correction looks wave-IV from overall wave count perspectives & wave-V up is still pending for higher levels targets in medium term.
Momentum indicators Daily KST & Daily MACD both are in SELL supporting short term trend. 8500 & 9000 looks strong support & Resistance levels respectively based on derivative option open interest data for short term. Sustain above short term reversal levels will confirm further rally towards 9120-9200 levels in near term. One should be stock specific & follow trend till it reverses in short term. This kind of short term time wise consolidation or correction is a good opportunity to buy for higher levels targets in medium term.
Stock Picks:
TATA MOTOR-BUY
CLOSE- Rs 565
Target- Rs 600
TATAMOTOR closed weekly in positive territory. Its looks like end of short term correction. It has wave-V up pending. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 540 for the target of Rs 600 in short term
LIC HOUSING-BUY
CLOSE- Rs 601
Target- Rs 640
LIC HSG closed weekly in positive territory. Its looks like end of short term correction. It has wave-V up pending. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 580 for the target of Rs 640 in short term
L&T FINANCE -BUY
CLOSE- Rs 94
Target- Rs 100/105
L&T Financial closed weekly in positive territory. It looks like end of short term correction. Its closed above 40 DMA. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 90 for the target of Rs 100/105 in short term.
BEL -BUY
CLOSE- Rs 1267
Target- Rs 1300/1350
BEL closed weekly in positive territory. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 1230 for the target of Rs 1300/1350 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.
CLOSE- 8697.60 (07.10.16)
Market closed weekly in positive territory. It has achieved my short term targets levels in the range of 8640-8540 as expected last week near recent lows in this correction. It made a low of 8555.20 levels. It sharply bounced back from this levels but one needs to wait for further confirmation to finally conclude short term reversal.
From wave count perspectives, it looks like complex correction in market in short term. In that case, it may have completed WXY correction near recent lows or it may have one last leg “wave-Z” pending till short term reverses.
Also Read
From FII data & short term actions point of view , there is unwinding of long positions by FII in this correction as a profit booking on derivative front but still buying on cash market is encouraging sign for medium term outlook of market till it proven otherwise.
BANK NIFTY it also looks still in corrective mode having similar wave count like nifty for short term. Short term outlook for bank nifty remains negative till it trades below 19900 levels & expect targets in the range of 19000-18700 levels till short term reverses. Medium term outlook for Bank nifty remains positive till it trades above 18300 levels.
Broader market continued it’s out performance as expected. Midcap & small cap indices closed at higher levels at the end of weekly trading session. There is inter- market divergence between main Indices (NIFTY/SENSEX) & broader market indices (MIDCAP/SMALL CAP) at current levels of market. And Nifty & sensex both closed monthly in negative territory at the end of September month giving some warning sign for end of this ABC (wave-X) pull back rally started from beginning of march-2016 this year But I would watch out further evidences from medium term perspectives till that this correction looks wave-IV from overall wave count perspectives & wave-V up is still pending for higher levels targets in medium term.
Momentum indicators Daily KST & Daily MACD both are in SELL supporting short term trend. 8500 & 9000 looks strong support & Resistance levels respectively based on derivative option open interest data for short term. Sustain above short term reversal levels will confirm further rally towards 9120-9200 levels in near term. One should be stock specific & follow trend till it reverses in short term. This kind of short term time wise consolidation or correction is a good opportunity to buy for higher levels targets in medium term.
Stock Picks:
TATA MOTOR-BUY
CLOSE- Rs 565
Target- Rs 600
TATAMOTOR closed weekly in positive territory. Its looks like end of short term correction. It has wave-V up pending. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 540 for the target of Rs 600 in short term
LIC HOUSING-BUY
CLOSE- Rs 601
Target- Rs 640
LIC HSG closed weekly in positive territory. Its looks like end of short term correction. It has wave-V up pending. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 580 for the target of Rs 640 in short term
L&T FINANCE -BUY
CLOSE- Rs 94
Target- Rs 100/105
L&T Financial closed weekly in positive territory. It looks like end of short term correction. Its closed above 40 DMA. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 90 for the target of Rs 100/105 in short term.
BEL -BUY
CLOSE- Rs 1267
Target- Rs 1300/1350
BEL closed weekly in positive territory. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 1230 for the target of Rs 1300/1350 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.