Short-term outlook for Nifty remains positive above 11,171: Devang Shah

Broader market indices such as midcap & small cap also closed weekly in positive territory, says Sevang Shah

NIFTY      

CLOSE- 11589.10 (07.09.2018)

The market closed first weekly negative close after a strong rally in last 2 months. It made a high of 11,751.80 levels on Nifty & 38,989.65 levels on Sensex so far in this rally. It looks like short-term consolidation phase from an overbought zone in the market as expected last week as the first possibility. It looks like the high possibility of the market to extend further for higher levels targets after completion of this time wise consolidation phase. Although short-term wave counts get keeps on changing but overall medium-term trend from wave count perspectives remains up for higher levels targets as mentioned below in short to medium term. Any kind of short-term consolidation or correction is stock specific buying opportunity till short-term reverses.

The short-term outlook for the market remains positive till Nifty trades above 11,171 levels and expecting targets in the range of 11,800- 12,000 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 9,951 levels and expecting targets in the range of 12,500-12,800 levels in the medium term.

Broader market indices such as midcap & small cap also closed weekly in positive territory. It also looks like the end of a short-term correction in the broader market. It may outperform in short-term & catch up with main indices with a faster pace in rally ahead. One should still find out an opportunity to BUY quality beaten down stocks of midcap & small cap index from medium to long-term perspectives. 

BANK NIFTY closed weekly in negative territory. It witnessed sharp correction from higher levels. It made a low of 27,307.30 levels during the week. 26,926 levels is strong support for bank nifty for short term, till it holds one can expect higher levels targets in the range of 28,800-29,800 levels in short term. 26,000 levels is crucial support for bank nifty from medium-term perspectives until it holds one can higher levels targets till 32,800-33,000 levels on Bank Nifty as per monthly chart attached here.

11,400 & 11,800 levels is strong support & resistance levels respectively based on option open interest data for expiry perspectives next week. 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 & DAILY MACD both went in to sell indicating volatility 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 10,500-10,400 levels on Nifty & 34,900-34,300 levels on Sensex in short term.

Stock Picks: 

TATA MOTORS - BUY

CLOSE – Rs 277.50

TARGET – Rs 289-305

TATA MOTORS closed the weekly in positive territory. It looks like the end of medium-term correction. Its daily momentum indicators are in BUY. It’s trading above 20DMA. One can BUY with a stop loss of Rs-255 for the target of Rs 289-305 levels in short-term. 

CONCOR - BUY

CLOSE – Rs 658

TARGET – Rs 705-725

CONCOR closed the weekly in positive territory. It has broken out of consolidation phase on the upside. It managed to hold 20 DMA. Risk Reward is favorable to BUY at current levels. Its daily momentum indicators are in BUY. One can BUY with a stop loss of Rs-620 for the target of Rs-705-725 levels in short-term. 

L&T FIN - BUY

CLOSE – Rs 167.95

TARGET – Rs 178-188

L&T FIN closed the day in positive territory. It looks like the end of short-term correction. Its weekly momentum indicators are in BUY. It closed above 200DMA. One can BUY with a stop loss of Rs-156 for the target of Rs-178-188 levels in short-term.

CADILA HEALTHCARE - BUY

CLOSE – Rs 425.80

TARGET – Rs 450-465

CADILA HEALTHCARE closed the weekly in positive territory. It’s outperforming in short term. Its daily momentum indicators are in BUY. It’s trading above 20DMA. One can BUY with a stop loss of Rs-390 for the target of Rs 450-465 levels in short-term. 

VOLTAS - BUY

CLOSE – Rs 598.40

TARGET – Rs 635-650

VOLTAS closed the day in positive territory. It looks like the end of short-term correction. Its weekly momentum indicators are in BUY. It’s trading above 20DMA. One can BUY with a stop loss of Rs-562 for the target of Rs 635-650 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