Short-term outlook for market remains positive: Devang Shah

Short-term outlook for the market remains positive till Nifty trades above 10,940 levels and expecting targets in the range of 11,700 levels in short term

NIFTY      

CLOSE- 11,426.85  (15.03.2019)

The market closed in positive territory for the fourth consecutive week last time. It extended gain on the upside, as expected. It achieved my first short term targets levels near recent high as expected. The market has made a high of 11,487 levels on the Nifty so far in this rally. One can expect the market to extend towards higher levels targets as mentioned below till it reverses. Any kind of decline or consolidation is a buying opportunity until short term reverses.

We have seen a sharp rally on bank nifty & Nifty during this week,  while midcap & small cap indices remained in consolidation zone. I expect midcap & small cap indices and stocks to rally in coming weeks and we may see main indices such as Nifty/Bank Nifty to be traded in consolidation range for some time. In that case, the Nifty may consolidate in the range of 11,100-11,500 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 and Smallcap 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 a high possibility end of this divergence at the recent bottom and from now onwards, we will get broader market rally for higher levels targets in the short-to-medium term. Risk Reward is favourable to BUY stock specific at current levels of the market.

The short-term outlook for the market remains positive until Nifty trades above 10,940 levels and expecting targets in the range of 11,700 levels in the short term. The medium-term outlook for the market remains positive until Nifty trades above 9951 levels and expecting targets in the range of 12500-12800 levels in the medium term.

BANK NIFTY also closed the week in positive territory. It's the first index to make lifetime high as expected. It has achieved my short term target levels near recent high. It has made a high of 29,658.30 levels so far in this rally. It can stretch till 30,200 levels in case of further extension in short term but it's a highly overbought zone as of now, and therefore, one can’t rule out profit booking from current levels. 27,000 levels is strong support on bank nifty in the short term, till it holds any kind of decline or consolidation is buying opportunity for higher levels targets in the medium term. It may consolidate in the range of 28,600- 29,700 levels in the short term. 23,600 levels is strong support for medium-term perspectives, and till it holds, one can expect higher levels targets in the range of 32,000-33,000 levels on medium-term perspectives.

11,000 & 11,500 levels is strong support & resistance levels, respectively based on option open interest data for expiry perspectives 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 & follow the trend with trail stop loss levels till it reverses. Risk Reward is favourable 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 & 34,400 levels on Sensex in short term.

Stock Picks:

JAIN IRRIGATION – BUY

CLOSE – Rs 62.60

TARGET – Rs 66/68

JAIN IRRIGATION closed weekly in positive territory. It consolidated in thin range during the week. 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 57.70 for the target of 66/68 levels in short term.

NALCO – BUY

CLOSE – Rs 54

TARGET – Rs 58/59

NALCO closed weekly in positive territory. It consolidated in thin range during the week. 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 52 for the target of 58/59 levels in short term.

CUMMINS – BUY

CLOSE – Rs 742

TARGET – Rs 800

CUMMINS closed weekly in positive territory. It consolidated in thin range during the week. 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 700 for the target of 800 levels in short term.

RAYMOND – BUY

CLOSE – Rs 815

TARGET – Rs 865/895

Raymond closed weekly in positive territory. It consolidated in thin range during the week. 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 765 for the target of 865/895 levels in short term.

CEAT – BUY

CLOSE – Rs 1,163.75

TARGET – Rs 1,220/1,250

CEAT closed weekly in positive territory. It consolidated in thin range during the week. 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 1113 for the target of 1220/1250 levels in short term.

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.