Short-term outlook for the market remains positive; Buy Cummins, Powergrid

NIFTY     

CLOSE- 10303.55 (19.10.2018)

Market closed weekly in negative territory. It made a high of 10710.50 levels during the week. It witnessed profit booking from these levels & made a low of 10249.60 levels at the end of weekly trading session. It still looks like pull back rally to continue further towards higher levels targets till short term reverses. It may also trade in broad range of 10000-10500 levels before further trend established ahead of expiry next week.

It looks like high possibility of end of wave-IV (ABC) medium Correction. One should also watch out other evidences for further confirmation of the same. But Risk reward is favorable to BUY stock specific at current levels from medium to long term perspectives, as market is near medium term support/ reversal levels as mentioned below.

Short-term outlook for the market remains positive till Nifty trades above 10138 levels and expecting targets in the range of 10800-11100 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 9951 levels and expecting targets in the range of 12500-12800 levels in medium 

BANK NIFTY also closed weekly negative territory. It made a high of 25,892.20 levels during the week. It also witnessed profit booking from these levels & made a low of 24860.10 levels at the end of weekly trading session. one can expect pull back rally to continue further towards higher levels targets till short term reverses. 24270 is short term support/reversal on Bank Nifty till it holds one can expect higher levels targets till 26100-26800 levels in short term.  It may also trade in broad range of 24500-25500 levels before further trend established ahead of expiry next week.23000 levels is strong support on Bank Nifty from medium term perspectives till it holds one can expect higher levels targets till 32000-33000 levels in medium term. It made 24500-25500 levels. It also looks like end of wave-IV (ABC) medium term correction on Bank Nifty. It looks like end of short term correction after 5 wave decline from peak. 

10000 & 10500/10800 levels is strong support & resistance levels respectively based on option open interest data for expiry perspectives for current month series. Any kind of such short term correction or consolidation is buying opportunity for medium to long term Investment perspectives till medium term reverses. Participation from beaten down broader market midcap & small cap indices is important to watch out from medium term perspectives from here on.

Momentum indicators Daily KST is in BUY & DAILY MACD is in sell indicating volatility 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 further continuation of sell off till 9950 levels on nifty & 32483 levels on Sensex in short term.

Stock Picks: 

CUMMINS – BUY

CLOSE – Rs 702

TARGET – Rs 730-760

CUMMINS closed the weekly in a positive territory. It looks like end of short term correction. Risk reward is favorable to buy at current levels. It has wave-V Up pending on upside. One can buy with a stop loss of Rs 659 for the target of 730-760 levels in short term.

POWERGRID – BUY

CLOSE – Rs 188.80

TARGET – Rs 195-200

POWERGRID closed the weekly in a positive territory. It looks like end of short term correction. Risk reward is favorable to buy at current levels. It has wave-V Up pending on upside. One can buy with a stop loss of Rs 180 for the target of 195-200 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 scripts mentioned above.