Short-term outlook on Nifty negative till it trades below 8289: Devang Shah

Expect targets in the range of 7,715-7,680 in the short term

NIFTY
 

CLOSE- 8185.80 (30.12.16)

Nifty closed the week in positive territory. It extended pull-back rally further this week as well. It made a high of 8,197 so far this week and closed nearer to it at the end of trading session. In a very extreme scenario, it can further retest the upper end of range, but conclusively short to medium term trend still remains down. Trader should use any kind of pull-back rally to sell or exit till short term trend reverses. It still looks like a pull-back rally as far as overall short term structure of market and its trading in broad range of around 8,300-7,900 in short term. Break of this range will finally confirm further trend with direction in short term.

From wave counts perspectives, it’s not conclusive to select final counts because of conflict of momentum with price at current levels. But it looks like wave-X pull back rally only and can extend further till upper end of range reverses. 8,000-8,200 is strong support and resistance levels respectively based on derivative option open interest data in short term.

Short term outlook for the market remains negative till Nifty trades below 8,289. We expect targets in the range of 7,715-7,680 in short term. Medium term outlook for the market remains negative till Nifty trades below 8,600 levels and expect targets in the range of 7,500-7,300 levels in medium term.

Nifty closed the month in negative territory. It closed the quarter and the year in positive territory for calendar year 2016. There is no change in long-term view of Indian equity bull market from overall broader wave counts perspectives based on calendar year 2016 closing. But we are in intermediate correction stage of this bull market till medium term reverses.

Momentum indicators - Daily KST & Daily MACD - are in BUY, indicating volatility will continue in short term. Close above short term reversal levels will confirm rally towards 8,460 levels in near term. One should stay stock specific and any kind of rise or consolation is selling opportunity for traders till short term reverses.

Stock Picks:

TATA ELXSI- BUY
 

CLOSE- Rs 1402.55

Target- Rs 1800-1850

TATA ELXSI closed the week in positive territory. It’s outperforming in short term. It closed above 20-DMA. Its Weekly momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with stoploss of Rs 1286 for the target of Rs 1800-1850 in short term.

ESCORTS- BUY
 

CLOSE- Rs 296.45

Target- Rs 321/330

ESCORTS closed the week in positive territory. Its daily momentum indicators are in BUY. Risk Reward is favourable to BUY at current levels. One can BUY with stoploss of Rs 288 for the target of Rs 321-331 in short term.

BALRAMPURCHINI- BUY
 

CLOSE- Rs 124.75

Target- Rs 138/144

BALRAMPURCHINI closed the week in positive territory. It’s outperforming in short term. It has broken out of short term consolidation of upside. Its daily momentum indicators are in BUY. One can BUY with stoploss of Rs 118 for the target of Rs 138-144 in short term.

Devang Shah: The author of www.trendtechno.com (Trade with Trend)

Consultant & Advisors in the world of Financial Market.

Disclaimer: The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.