Nifty Bank to lead in ongoing rally in short term: Devang Shah

One should buy selected stocks form banking sector to take advantage of this rally, says Devang Shah

NIFTY      

CLOSE- 10283.60 (17.11.17)

Nifty closed the week marginally in negative territory. Market managed to hold short-term support/reversal levels of 10,124 as mentioned last week and we have seen sharp recovery around from these levels. It made a low of 10,094 levels on Nifty and 32,683.59 levels on Sensex in this period of time-wise correction/consolidation. It looks like extension case further towards upper end of channel as anticipating from wave count perspectives till these support holds. One can expect market to rally towards higher levels targets as mentioned below till short term reverses. Traders should buy stock-specific and book profit at regular intervals. 

Short-term outlook for the market remains positive till Nifty trades below 10,094 and is expecting target of 10,600-10,800 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.

Although it looks like very high levels both from technical (Extended Rally) and fundamental perspectives (valuation wise) but many stocks are giving fresh breakouts from long consolidation and some of the stocks that completed medium term correction has started to participate in this rally further. Therefore, it’s advisable to be stock specific at current levels with the proper risk management approach. 

I have drawn channel on both Nifty & Sensex weekly charts. It looks like high possibility of extension of this rally till upper end of channel as per weekly chart towards revised short term targets levels as mentioned earlier. In such kind of bull markets, normally wave-3 completes and touches upper end of channel before any kind of major price-wise correction. It looks like high possibility to me at current levels of market till short term reverses. It will become strong fast and furious rally in this phase of market. 

Nifty Bank is relatively outperforming at current levels of market. It has broken out of short term consolidation range. It also closed the week in a positive territory. It also looks like extension case from wave count perspectives. It has strong support at 25,200 levels, till it holds one can expect rally towards 26,900-27,000 levels in short term.  It looks like Nifty Bank will lead in this rally in short term. One should buy selected stocks form banking sector to take advantage of this rally. 

10,000-10,200 is strong support and 10,500 levels is strong resistance levels respectively based on option open interest data so far during October month series. Any kind of short-term correction or consolidation is buying opportunity for medium to long term till medium term reverses.

Momentum indicators Daily KST & daily MACD went in to SELL showing weakness for short term trend but one should wait for price wise reversal to finally conclude short term trend reversal. Till then one should be stock-specific and follow the trend with trail stop loss levels till it reverses. Close below short-term reversal levels will lead to price wise short-term correction towards 9,680 on Nifty & 31,081.83 levels on Sensex in short term.

Stock Picks: 

NTPC-BUY

CLOSE: Rs 178

TARGET: Rs 190-200

NTPC closed the week in a positive territory. It looks like end of short term consolidation. It managed to hold support of  40-DMA. Risk reward is favorable to buy at current levels. Its weekly momentum indicators are in BUY. One can buy with a stop loss of Rs 173.50 for the target of Rs 190-200 in short-term. 

AJANTA PHARMA- BUY

CLOSE: Rs 1274

TARGET: Rs 1330-1380

AJANTA PHARMA closed the week in a positive territory. It has completed medium-term correction. Risk reward is favourable to buy at current levels. Its daily momentum indicators are in BUY. One can buy with a stop loss of Rs 1208 for the target of Rs 1330-1380 in short-term. 

RIL - BUY

CLOSE: Rs 910

TARGET: Rs 970-1000

RIL closed the week in a positive territory. It has completed short term correction. It managed to hold crucial support of 40-DMA. Risk reward is favourable to buy at current levels. Its daily momentum indicators are in BUY. One can buy with a stop loss of Rs 873 for the target of Rs 970-1000 in short-term. 

PIDILITE- BUY

CLOSE: Rs 840

TARGET: Rs 870-900

Pidilite closed the week in a positive territory. It is showing signs of extension for short term. Its momentum indicators are in BUY. Risk reward is favourable to buy at current levels. One can buy with stop loss of Rs 807 for the target of Rs 870-900 levels in the short term.

DCB BANK- BUY

CLOSE: Rs 178.70

TARGET: Rs 190-200

DCB BANK closed the day in positive territory. Its consolidating in bullish triangular consolidation. Its trading near crucial support of 200-DMA. Risk reward is favorable to buy at current levels. One can buy with a stop loss of Rs 165 for the target of Rs 190-200 levels in short term.

Devang Shah: 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; the views given above are the personal views of the analyst. 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.