Short-term outlook for the market remains positive: Devang Shah

NIFTY      

CLOSE- 11278.35 (27.07.2018)

The market closed weekly in positive territory. It is slow & Steady extending on the upside after the breakout from range as expected last week. It made a high of 11,283.40 levels on Nifty & 37,368.49 levels so far during this week. Nifty made a fresh all-time high this week as expected after Sensex. One can expect the market to trend towards further 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.

We have seen broader market participation this week & we had a rally across the board in the market after a long time. As expected earlier, Midcap & small cap indices & quality stocks from these segments had bottomed out & we will see a sharp recovery in these stocks & indices in the coming trading session. These divergences now ended & broader market will also join the party with main indices Nifty & Sensex. Broader market will catch up with main indices with faster face & relatively outperform in the coming months of the calendar year 2018. One should still find out the opportunity to BUY quality beaten down stocks of midcap & small cap index from medium to long-term perspectives.

The short-term outlook for the market remains positive till Nifty trades above 10,929 levels and expecting targets in the range of 11,500- 11,600 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 the medium term.

Bank Nifty closed weekly in positive territory. It extended rally on upside & achieved my short term targets levels near recent high as expected earlier. It made a high of 27660 levels so far in this rally & closed just 1 point away for its lifetime high of 27,661 levels. 26,000 level is strong support for Bank Nifty for short term, till it holds one can expect higher levels targets till 28,400 levels in short-term & further above 29,800-30,000 levels in the medium term. Any kind of decline is also buying opportunity for Bank Nifty for short to medium term perspectives.

11,000 & 11,500 level is strong support & resistance levels respectively based on option open interest data for current month series expiry perspectives. As expected market has made new lifetime high on Nifty & Sensex so far & By looking at current structure, I feel market is going to surpass all-time high soon on rest of the other indices such as BANK NIFTY, BSE 500, Midcap & Small cap indices as well in coming months & 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 & DAILY MACD both are in BUY supporting the 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 lead to sharp correction till 10,500-10,400 levels on Nifty & 34,900-34,300 levels on Sensex in short term.

Stock Picks: 

JSPL- BUY

CLOSE – Rs 203

TARGET – Rs 225-230

JSPL closed the weekly in positive territory. It looks like the end of medium-term correction. 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-178 for the target of Rs 225-230 levels in short-term. 

L&T - BUY

CLOSE – Rs 1,311

TARGET – Rs 1,350-1,375

L&T closed the weekly in positive territory. It still trading above 20 DMA. Risk Reward is favourable to BUY at current levels. Its momentum indicators are in BUY. One can BUY with a stop loss of Rs-1250 for the target of Rs-1350-1375 levels in short-term. 

DHFL - BUY

CLOSE – Rs 619

TARGET – Rs 645-680

DHFL closed the weekly in positive territory. Its consolidating in the narrow range. 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-598 for the target of Rs-645-680 levels in short-term. 

VOLTAS - BUY

CLOSE – Rs 574

TARGET – Rs 608-630

VOLTAS closed the weekly in positive territory. It is outperforming in short term. It looks like the end of medium-term correction. 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-540 for the target of Rs-608-630 levels in short-term.

CEAT - BUY

CLOSE – Rs 1,400

TARGET – Rs 1,520-1,600

CEAT closed the weekly in positive territory. It looks like the end of medium-term correction. 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-1295 for the target of Rs-1520-1600 levels in short-term.

CADILA - BUY

CLOSE – Rs 374

TARGET – Rs 395

CADILA closed the weekly in positive territory. It looks like the end of medium-term correction. 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-350 for the target of Rs-395 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