Nifty outlook and top trading ideas by Devang Shah for today's trade

NIFTY     
CLOSE- 10767.65 (08.06.2018)
 
Market closed 3rd consecutive week in positive territory. It further consolidated in narrow range during the week with positive momentum. It looks like triangular consolidation kind of possibility in wave-ii as preferred wave count alternate in short term. Any kind of decline or short term consolidation is stock specific buying opportunity till short term reverses. One can expect higher levels targets as mentioned below in short to medium term.
 
Alternatively, Nifty has resistance around 10,800-10,900 levels, failed to sustain above these levels will open up alternate possibility of bigger triangular consolidation structure in wave-IV as per chart attached. It’s not my preferred alternate at current levels of market but one should closely watch out market behaviour at higher levels to finally conclude the same.

 

Short-term outlook for the market remains positive till Nifty trades above 10,417 levels and expecting targets in the range of 10,900-11,000 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.
 
Broader market, particularly midcap & small-cap indices started to show strength from crucial lower end channel support levels as mentioned last week. Sustainability of positive momentum particularly in broader market is an additional confirmation of for short term view of overall market. It’s a very good opportunity to build up portfolio in such kind of quality midcap/ small cap stocks at current levels.

 
BANK NIFTY closed weekly in positive territory. Its consolidating in range of around 26,200-26,900 levels. It looks like bullish triangular kind of consolidation for short term.  It’s still outperforming at current levels of market. It made a high of around 27058.20 levels. It looks like impulsive 5 wave advance structure on daily chart . One can expect higher levels targets around 27,700 levels till it holds crucial support of 25,550 levels in short term & further above 29,600-30,000 levels in medium term. Any kind of decline is also buying opportunity for bank nifty for short to medium term perspectives.

 
10,600 & 11,000 levels is strong support & resistance levels range respectively based on option open interest data for current month series. By looking at current structure, I feel market is going to surpass all time high soon on main indices & this rally will have time wise consolidation rather than price wise correction in short term. Any kind of such short term correction or consolidation is buying opportunity for medium to long term Investment perspectives till medium term reverses.
 
Momentum indicators Daily KST are in BUY & DAILY MACD are in sell indicating volatality to continue in short term. One should be stock specific & follow the trend with trail stop loss levels till it reverses. Close below short term reversal levels will lead to sharp correction till 9950-9800 levels on nifty & 32400-31800 levels on Sensex in short term.

 
Stock Picks:
 
DHFL- BUY
CLOSE – Rs 620.50
TARGET – Rs 645/680
 
DHFL closed weekly in positive territory. It’s at the verge of breakout near upper end of range. It’s outperforming in short term. It’s trading above 40 DMA. Its weekly momentum indicators are in BUY. One can BUY with stop loss of 590 for the target of 645/680 levels in short term.
 
M&M- BUY
CLOSE – Rs 908.60
TARGET – Rs 925/940
 
M&M closed weekly in positive territory. It’s outperforming in short term. It has wave-V up pending as per daily chart. Its daily momentum indicators care BUY. Risk reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs 890 for the target of Rs 925/940 levels in short-term.

 
SUN TV- BUY
CLOSE – Rs 918
TARGET – Rs-960/980
 
SUN TV closed the weekly in positive territory. Its look like end of medium term term correction. This consolidation looks like bullish triangular structure. Its daily momentum indicators are in BUY. It managed to found support near 200 DMA. Risk reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs 880 for the target of Rs 960/980 levels in short-term.
 
BATA INDIA - BUY
CLOSE – Rs 767
TARGET – Rs 795/815
 
BATA closed the weekly in positive territory. It’s trading above 40 DMA. It looks like end of short term correction. Its daily momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with a stop loss of Rs-740 for the target of Rs 795/815 levels in short-term.

 
TATA CHEMICALS - BUY
CLOSE – Rs 737.50
TARGET – Rs 760/780
 
TATA CHEMICALS closed the weekly in positive territory. It’s consolidating in narrow range. 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-710 for the target of Rs 760/780 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