Nifty outlook and 4 stock picks by Devang Shah for short-term trade

NIFTY

CLOSE- 8897.55 (03.03.17)

Nifty closed first week in negative territory after gains in preceding five consecutive weekly positive closes. It failed to extend above 9,000 levels on Nifty and faced resistance near these levels. It made a high of 8,992.50 levels. It witnessed profit-booking from these levels as mentioned last week. It looks like wave –IV consolidation stage as per weekly chart but it has still wave-V up pending for higher levels targets in short term. Trader should use such kind of decline or consolidation to buy stock specific for further higher level targets as mentioned below in short to medium term.

It has strong first support zone around 8800 levels on Nifty and second support zone around 8700 levels on Nifty in short-term daily chart. Market may spend some time in this zone before further continuation of trend for higher level targets. Investors should stay invested and buy stock specifics in such kind of consolation stage.
 

Short-term outlook for the market remains positive till Nifty trades above 8,680 levels and expects targets in the range of 9,150-9,200 levels in short term. Medium-term outlook for the market remains positive till Nifty trades above 8,327 levels and expecting target of 10,000 levels on Nifty in medium term.

Bank Nifty has also closed the week in negative territory. It has also similar short term wave counts like Nifty. It looks like wave-IV consolidation stage in short-term. It has strong supports around 20,500 levels and 19,970 levels respectively in short-term. Till second support of 19,970 levels holds any kind of decline or consolidation is a buying opportunity for Bank Nifty and one can further expect higher levels targets till 21,600-22,000 levels in short-term. 

Momentum indicators Daily KST & daily MACD both went in to SELL indicating volatility to remain in short-term till market breaks above 9000 levels on Nifty. It may consolidate in the range of 8,700-9,000 levels in short term before further uptrend begins. Close below short term reversal levels will lead to possible correction till 8,540-8,460 levels on Nifty. One should be stock specific and follow the trend with trail stop loss levels till it reverses from trading perspectives. 

Stock Picks:

HINDUSTAN UNILEVER- BUY

CLOSE- Rs 877.15 

Target- Rs 895-910

HUL closed the week in positive territory. It has out performed 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 868 for the targets of Rs 895-910 levels in short term.

TATA CHEMECALS- BUY

CLOSE- Rs 562.85

Target- Rs 590-605

TATA CHEM closed in positive territory. It looks like the end of short-term consolidation for the stock. It closed above 40-DMA. Risk reward is favourable to BUY at current levels. One can BUY with stoploss of Rs 549 for the target of Rs 590-605 in short term.

ORIENTAL BANK OF COMMERCE - BUY

CLOSE- Rs 123

Target- Rs 134/136

OBC closed in positive territory. It has outperformed in short-term. It closed above 40-DMA. Risk reward is favourable to BUY at current levels. One can BUY with stoploss of Rs 118 for the targets of Rs 134/136 in short-term.

EXIDE- BUY

CLOSE- Rs 210.90

Target- Rs 226

EXIDE closed daily in negative territory. It has still wave-V up pending for higher level targets. This consolidation is buying opportunity till it holds above 40-DMA. Risk reward is favourable to BUY at current levels. One can BUY with stoploss of Rs 203 for the target of Rs 226 in 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.