Nifty outlook and top trading ideas by Devang Shah

NIFTY     
CLOSE- 10558.85 (05.01.2018)
 
Market closed 5th consecutive week in positive territory. Its slow & steady extending towards short term targets levels as expected last week. Broader market is out performing compare to nifty at current levels. All the other indices such as midcap & small cap also closed weekly in positive territory. One should expect market to trend towards short term targets levels till it reverses. Typically, we have seen 5 positive weekly rallies in recent times. Since we have closed 5th positive weekly close, one can’t rule out profit booking from higher levels. Trader should be stock specific & book profit at current levels.

 
Market is last leg of extended rally as per daily chart. It has broken out of triangular kind of pattern on upside as per hourly chart. One should expect market to trend towards higher levels targets in near term till it reverses. One should be stock specific & light in leveraged position at these crucial cluster of resistance zone in short term.

 
Short-term outlook for the market remains positive till Nifty trades above 10,370 levels and expecting target of 10,700-10,850 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 8,968 levels and expecting targets in the range of 12,000-12,200 levels in medium term.

 
Nifty Bank closed weekly in positive territory. It’s still under performing in this rally compare to main indices & broader market as well. Extension in bank nifty will be to watch out in short term. 25,280 is crucial support for bank nifty in short term, till it holds one can expect higher levels targets till 26,300-26,600 levels in short term. On the other hand, break of this support levels will lead to sharp correction till 24900 levels in short term. Nifty Bank behaviour is important to watch out in short term.
 
I feel this is last phase of extended wave-(3) rally of Bull market & typically market will finally TOP Out in January for wave-(4) price wise corrections as per Time cycle. Trader should be stock specific & closely watch out market behaviour at higher levels. Market will remain volatile ahead of corporate earnings season this month.

 
10,000-10,800 levels is strong support & resistance levels respectively based on option open interest data so far for January month series. Any kind of short term correction or consolidation is 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. One should be stock specific & follow the trend with trail stop loss levels till it reverses. Close below short term reversal levels will confirm price wise correction till 9,880/9,700 levels on Nifty & 32,300-31,000 levels on Sensex in short term.

 
Stock Picks:
 
INDUSIND BANK- BUY
CLOSE – Rs 1700
TARGET – Rs 1750/1820
 
IndusInd Bank closed weekly in positive territory. It has broken out of medium term bullish base triangular kind of consolidation pattern. It has wave-V up pending on weekly chart. Its momentum indicators are in BUY. Risk reward is favorable to buy at current levels. One can buy with stop loss of 1647 for the target of 1750-1820 levels in short term.
 
DHFL-BUY
CLOSE – Rs 610.50
TARGET – Rs 636-660
 
DHFL closed weekly in positive territory. It’s managed to hold support of 100 DMA & Showing sign of extension further. It has also wave-V UP Pending as per monthly charts. Risk reward is favourable to buy at current levels. One can buy with a stop loss of Rs 590 for the target of Rs 636-660 in short-term.

 
CADILA HEALTHCARE- BUY
CLOSE – Rs 441
TARGET – Rs 455-465
 
Cadila Healthcare closed the weekly in a positive territory. Its looks like end of medium term correction. It’s managed to close above 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 423 for the target of Rs 455-465 in short-term.
 
ADANI PORTS- BUY
CLOSE – Rs 422.50
TARGET – Rs 440-450
 
Adani Ports closed the weekly in a positive territory. It’s showing sign of extension further after end of medium term consolidation. It has wave-V UP pending as per monthly chart. 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 400 for the target of Rs 440-450 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