Nifty may consolidate in the range of 11,300-11,700: Devang Shah

The short-term outlook for the market remains positive until Nifty trades above 11,118 levels.

NIFTY      

CLOSE- 11,623.90 (29.03.2019)

The market closed in positive territory for the sixth consecutive week. It extended gain further as expected last week.  It made a high of 11,630.40 levels during the week. It’s very close to my short term targets levels as expected earlier in my weekly update. One can expect the market to extend towards higher level targets as mentioned below till it reverses. One can’t rule out profit-booking from higher levels. Any kind of decline or consolidation is buying opportunity till short-term reverses.

We have seen sharp rally on Bank Nifty and Nifty in the short term for the whole month of March. Midcap and small-cap indices closed the week in positive territory. This week, we have also seen broader market participation as expected.  I expect mid-and- small-cap indices and stocks to see a rally in coming weeks and we may see main indices such as Nifty/Bank Nifty to be traded in the consolidation range for some time. In that case, Nifty may consolidate in the range of 11,300-11,700 levels in the short term.

It looks like the beginning of wave-III of 5 after long consolidation in the range from wave count perspectives. Participation from the broader market (Particularly midcap & Small cap indices) from the last couple of days are a good sign at current levels of the market as expected. It has to catch up now for further confirmation of the overall trend of the market. It looks like high possibility end of this divergence at the recent bottom and from now onwards, we will get a broader market rally for higher levels targets in short to medium term. Risk Reward is favorable to BUY specific stocks at current levels of the market.

The short-term outlook for the market remains positive till Nifty trades above 11,118 levels and we expect targets in the range of 11,700 level in the short term. The medium-term outlook for the market remains positive till Nifty trades above 9,951 levels and we expect targets in the range of 12,500-12,800 levels.

BANK NIFTY also settled in the positive territory for the sixth consecutive week. It is the first index to make a lifetime high as expected. It has achieved my short term targets levels as expected. It made a high of around 30,600 levels during the week. It is highly in an overbought zone as of now, therefore, one can’t rule out profit booking from current levels. 

27,000 level is the strong support on Bank Nifty in the short term. Till it holds any kind of decline or consolidation, it is a buying opportunity for higher level targets in the medium term. It may consolidate in the range of 29,200- 30,600 levels in the short term. 23,600 level is strong support for medium-term perspective, till it holds the level, one can expect higher levels targets in the range of 32,000-34,000 levels on medium-term perspective.

11,300 and 12,000 level is strong support and resistance levels, respectively based on option open interest data for current month series. Any kind of short term correction or consolidation is a stock specific buying opportunity for medium to long term investment perspectives till medium term reverses.

Momentum indicators Daily KST & DAILY MACD both are in BUY supporting short term trend of the market. One should be stock specific and follow the trend with trail stop loss levels till it reverses. Risk Reward is favorable to BUY at current levels of the market. Close below short term reversal levels will lead to sharp correction till 10,300 levels on Nifty and 34,400 level on Sensex in the short term.

Stock Picks:

CUMMINS – BUY

CLOSE – Rs 749

TARGET – Rs 800/820

CUMMINS closed the week in positive territory. It consolidated in a thin range during the week. It is holding crucial support of 20-day moving average (DMA). Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 700 for the target of Rs 800/820 levels in short term.

NALCO – BUY

CLOSE – Rs 55.60

TARGET – Rs 59/63

NALCO ended the week in positive territory. It is consolidating in thin range from the last two weeks. Its weekly momentum indicators are in BUY. It has managed to hold crucial support of 20-DMA. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 53 for the target of Rs 59/63 levels in the short term.

TATA CHEM – BUY

CLOSE – Rs 598

TARGET – Rs 640

Tata Chemicals closed the week in negative territory. It consolidated in thin range during the week. Its weekly momentum indicators are in BUY. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 570 for the target of Rs 640 levels in the short term.

TATA GLOBAL – BUY

CLOSE – Rs 202.80

TARGET – Rs 211/216

TATA GLOBAL closed the week in positive territory. It managed to close above 20 DMA. Its daily momentum indicators are in BUY. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 195 for the target of Rs 211/216 levels in the short term.

AJANTA PHARMA – BUY

CLOSE – Rs 1,029

TARGET – Rs 1,090/1,120

AJANTA PHARMA closed the week in positive territory. It managed to close above 20 DMA. Its daily momentum indicators are in BUY. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 982 for the target of Rs 1,090/Rs 1,120 levels in the short term.

ULTRA TECH CEMENT – BUY

CLOSE – Rs 4,007

TARGET – Rs 4,150/4200

ULTRA TECH CEMENT closed the week in positive territory. It managed to hold crucial support of 20-DMA. Its daily momentum indicators are in BUY. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 3,850 for the target of Rs 4,150/4200 levels in the short term.

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Devang Shah: The author of www.trendtechno.com (Trade with Trend) and an independent market analyst.

Disclaimer:  The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.